Americanas cross contamination sickens the market – 03/12/2023 – Marcos de Vasconcellos

Cross-contamination is one of the main causes of foodborne illnesses – the infamous salmonella, toxoplasmosis and amoebiasis, for example. She explains how someone who just ate a heart of palm patty at the bar ended up with a microbe that lives in raw meat.

It’s not sorcery, it’s microbiology. The knife used to slice the heart of palm had previously cut the infected meat – and was not cleaned as it should have been. The phenomenon was noticed by a Hungarian doctor (Ignaz Semmelweis) in 1846. Since then, we haven’t stopped washing our hands, plates and cutlery. And we die less for that kind of problem.

There is no bath that prevents, however, the loss of R$ 20 billion from Americanas from melting other assets in the financial market. The wave of insecurity led to the withdrawal of BRL 66 billion from funds that had at least 15% of their investments in credit securities in Brazil, according to a survey by Itaú BBA. The study counted from the day after the leak was announced (January 12) to March 2.

The funds that took the most were those that allow immediate withdrawal or in a few days, called high liquidity funds. They are normally used to keep the cash of companies generating some income.

And at those times, the just pay for the sinners, like when the whole class at school is suspended because of the pranks of the most rowdy little group.

Even funds that were not exposed to Americanas shares were looted. And the withdrawals, in themselves, in this volume, lead to a drop in the value of the shares. As no one stops a snowball, other investors, upon seeing the drop in the value of the shares, also began to withdraw their investments in the funds.

To pay for the withdrawals, managers had to dispose of good assets they had in their portfolios. And, when everyone goes to sell, you already know, the price tends to the ground.

Fund managers who had no exposure to retail – and stayed out of the wave of withdrawals – say it was an ideal time to buy good assets, at a bargain price, from their downcast colleagues. In addition to the assets, they received contributions from frightened investors.

As if the contamination of the fund industry was not enough, it became clear this week how the possible fraud by Americanas stabbed any confidence in its peers in the domestic market.

On Friday (10), in the first trading session after the release of their balance sheets for the fourth quarter of last year, Magazine Luiza and Via (owner of the Casas Bahia and Ponto chains) saw their shares (MGLU3 and VIIA3) melt on the Stock Exchange.

In the first minutes of trading, Magalu’s shares fell by another 11%. Afterwards, they recouped most of their losses. Via’s dropped 12% and didn’t come back even half of that until the end of the day.

In the case of Via, the accounts came with a loss far greater than expected by market analysts. But not Magazine Luiza. It presented a loss of BRL 35.9 million, while the market was waiting for a hole of BRL 83.5 million. It still melted.

It turns out that, practically at the same time that it presented good numbers, Magalu announced that it was investigating an anonymous complaint that there would be irregularities in the payment of some of its distributors.

There is almost no information about the problem, apart from the fact that it is linked to bonus operations and that the anonymous complaint cited three distributors, responsible for 3.5% of the area’s volume in 2022. The trauma at Americanas was enough to that investors would want to dump the stock before hearing anything else.

As long as those responsible for the chaos at Americanas are not properly identified and punished by the competent authorities and real mechanisms are not identified to prevent circumvention of transparency, insecurity (which is already huge in the country) makes it difficult to bet seriously on retail, a sector with essential role for national development.

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