Vale and Petrobras bring euphoria to the Bovespa stock exchange.
At 13:40 PM (Brasilia time), the benchmark index of the Brazilian stock exchange was up 1,58%, at 57.119 points, its highest level since October 2014. Meanwhile, the commercial dollar was up 2,06%, at R$ 3,0732 for buying and R$ 3,0753 for selling. In the futures interest rate market, the DI for January 2016 was up 0,02 percentage points, at 13,70%, while the DI for January 2020 was up 0,07 pp, at 12,89%; Petrobras shares (PETR3; PETR4) were up nearly 4%; Vale also registered gains, despite the cut in the miner's rating by S&P from "BBB+" to "BBB", with a negative outlook.
SÃO PAULO - The Ibovespa is trading higher this Monday (4) after the Brazilian market was closed for Labor Day last Friday. Corporate news remains on the radar with comments from the Minister of Mines and Energy, Eduardo Braga, about Petrobras and a cut in Vale's rating by S&P. Among economic indicators, the Focus Report recorded the first increase in Selic projections since March. Abroad, US and European stock markets are up.
At 13:40 PM (Brasilia time), the benchmark index of the Brazilian stock exchange was up 1,58%, at 57.119 points, the highest level since October 2014. Meanwhile, the commercial dollar was up 2,06%, at R$ 3,0732 for buying and R$ 3,0753 for selling. In the futures interest rate market, the DI for January 2016 was up 0,02 percentage points, at 13,70%, while the DI for January 2020 was up 0,07 pp, at 12,89%.
According to Luis Gustavo Pereira, chief analyst at Guide Investimentos, the index is rising today driven by a squeeze movement in Petrobras, Vale, and steel companies. In his opinion, the cost of carrying short positions in these companies has increased, which, combined with the current flow of foreign investment in the BM&FBovespa, leaves little room for sharper declines in the Ibovespa.
It is worth remembering that today the new theoretical Ibovespa portfolio comes into effect, without PDG (PDGR3), Even (EVEN3) and Light (LIGT3), but with Smiles (SMLE3).
Petrobras and Vale in the spotlight.
Petrobras (PETR3; PETR4) shares rose nearly 4%. The Minister of Mines and Energy, Eduardo Braga, stated during a visit to Houston for the Offshore Technology Conference (OTC), that Petrobras should not be obligated to participate in new pre-salt auctions. Under the current regulatory framework for the pre-salt, the state-owned company is the sole operator, meaning it must bid with at least a 30% stake in all blocks offered by the government.
According to him, Congress is open to discussing the current legal requirement and stated that the rules need to be reviewed before the new pre-salt auctions. The government will open new oil concessions this year, but the next pre-salt offerings may be postponed to 2017, the minister admitted. The bidding was initially scheduled for 2016, but is likely to be postponed due to the volatility of the oil market and the currently low price of a barrel of oil.
Also trading sharply higher was Vale (VALE3; VALE5), whose shares followed the performance of its ADRs (American Depositary Receipts) on Friday and rose despite S&P's downgrade of the miner's rating from "BBB+" to "BBB," with a negative outlook. Iron ore, which rose 2,4% to US$57,55 at the port of Qingdao, was again a driver of the increase. According to independent analyst Flávio Conde, the increased optimism among global investors regarding mining companies stems from the belief that the worst is over and that smaller mining companies with high costs are now closing, helping to reduce supply pressure on the commodity.