Read this Friday’s edition of the FolhaMercado newsletter (20) – 10/20/2023 – Market

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Brazilian Shein is one of the most expensive

Retailer Shein still has a price advantage over its rivals operating in Brazil, but this difference has fallen in recent months, when the Chinese company expanded its clothing production in the country, shows a report from BTG Pactual.

• When purchasing power parity is taken into account, which considers the population’s purchasing power with the local cost of living, the retailer’s clothes here are the most expensive in the world.

In numbers: the basket of eight products (dress, jeans, jacket, skirt, sweater, t-shirt, boots and bag) sold in Brazil costs $156 (R$ 788), while in Mexico it costs $167.

• In the purchasing power of the population, the cost rises to $311 (R$ 1,571). Shein prices in 15 countries were analyzed.

• Compared to its competitors, the Chinese company has prices 26% cheaper than those from Renner, 22% lower than those of Riachuelo and 17% more affordable than C&A.

• The difference, however, was greater in April, when it reached 68% in relation to Renner, for example.

Which explains: Last month, Shein joined Remessa Compliance, a government program that regulates international purchases.

• For purchases of up to US$50, the import tax is zero for now, but there is a 17% ICMS charge – a tax that Shein subsidizes to consumers.

• The company is also in the process of increasingly nationalizing its production, and will invest R$750 million in three years to have 2,000 factories in the country connected to its algorithm.

So far, the platform has hired more than 330 national clothing manufacturers, but says it notices difficulty in adapting to the production deadline charged by the retailer.

She launched yesterday (19) three new categories of Brazilian clothing: plus size, lingerie and fitness.

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Petrobras, fuels and Venezuela

Petrobras will increase the price of a liter of diesel by R$ 0.25 and reduce by R$ 0.12 liter of gasoline in its refineries from Saturday (21).

A liter of diesel sold by the state-owned refineries will cost R$4.05, and that of gasoline, R$2.81. The transfer to the pumps depends on the strategies of the stations and distributors.

Why did one fall and another rise:

• The state-owned company attributed the drop in gasoline to the end of summer in the Northern Hemisphere, when consumption there is higher and prices rise.

• Diesel rose because “sustained global demand is observed, with the expectation of a seasonal increase” with the approach of winter in the Northern Hemisphere, he said.

The last time Petrobras changed prices, on August 16, Brent oil cost $85 per barrel. Now, with market fears about the repercussions of the Israel-Hamas war on producing countries, the price has risen to $92 per barrel.

Venezuela on the radar: the company’s president, Jean Paul Prates, said that the state-owned company will “seriously think” about investing again in the neighboring country now that US sanctions have been eased.

The Brazilian was already a partner of the Venezuelan PDVSA in oil exploration projects in that country and at the Abreu e Lima Refinery, in Pernambuco, one of the pivots of Lava Jato. But the partnership ended up not bearing fruit.

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To read

• “Trader or Investor? Learn how to invest in the stock market without falling into the traps of behavioral biases” (Fernando Chague and Bruno Giovannetti, Intrínseca, 176 pages, R$ 49.90, ebook R$ 24.90)

The book by FGV economists and professors shows the traps generated by behavioral biases of those who enter the stock market to make money in the short term and, to do so, resort to day trading.

• The practice consists of trading assets (shares, index contracts, commodities, currencies…) on the same day, aiming to profit from the frantic rise and fall of prices.

The authors show that, in the daily struggle, professional trading desks –banks and brokers– swim by arm. For the vast majority of individual investors, losses and flight from the Stock Exchange remain.

• To prove the argument, research results are presented analyzing millions of operations carried out in recent years, when a flood of CPFs arrived on the Brazilian Stock Exchange.

The other character in the book is the investor, who has the opposite view to that of the trader: focusing on the long term, that is, expecting returns in years, not days.

• The authors also list ten “commandments” for anyone who wants to make money on the stock market – being an investor, not a trader.