Read this Thursday’s edition of the FolhaMercado newsletter (4) – 04/04/2024 – Market

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Silveira recognizes conflict with Prates

The Minister of Mines and Energy, Alexandre Silveira, said in an interview with Sheet that there are “heated” debates between him, as a government representative, and Jean Paul Prates, president of Petrobras.

Silveira stated that the same differences occurred between people who held these positions in other governments and that they are “healthy” and not personal.

The interview takes place at a time of renewed fervor over Prates’ position, as reported by the Panel SA column

• Now, the column reports, there is a new round of pressure on the executive from Minister Rui Costa (Casa Civil), who has nominated names for the position to President Lula (PT). The minister denies it.

Open quotes for Prates (read the full interview here):

↳ “I’ve always had heated, real debates. But transparent debates about what I, as a government, defend at Petrobras; and the president of Petrobras, naturally, [defende] as president of a company. The roles are different. That’s why there is a conflict.”

↳ “It was a noise [a repercussão do episódio sobre dividendos]. It was you sitting on top of a packet of cassava crackers. You made noise and then ate the bran, which is really delicious, even better than eating the biscuit.”

↳ “Petrobras will be the company that will gain the most value in President Lula’s third term.”

What else did the minister say:

– Until when will the country explore oil? “Until I can reach HDI [Índice de Desenvolvimento Humano] at the height of what industrialized countries have achieved, which today can contribute very little to the environmental issue because they industrialized long before us.”

– He advocated that the country discuss the beginning of the exploration of “fracking” gas (also known as shale gas), common in countries such as the USA and Argentina. The technique is criticized by environmentalists.

– The ministry wants to create stricter rules for electricity concessions, anticipate the renewal of those who can already comply with the new standards and bar the extension of those who do not adhere to such standards — which could impact Enel’s case.

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Betting giants target Brazil

The number of sports betting companies operating in Brazil has exploded in recent years – as can be seen in sponsorships of major sporting events.

Now, the sector may be preparing for consolidation, with the entry of giants from abroad.

What explains: market regulation, sanctioned by President Lula at the end of last year, guarantees legal security for foreign companies to establish themselves here.

• Before that, in 2018, betting had already been legalized, but the market was waiting for regulation, which only came last year.

• The entry into force of the new rules should attract names like DraftKings and MGM Resorts, according to Bloomberg.

Consolidation? Industry agents assess that the combination of giants operating here with the new rules defined by the government should reduce market diversification.

This is because the new law requires companies to pay up to R$30 million for a license that must be renewed every five years. A 12% tax will also be charged on gross gaming revenues.

This cost can be very high for small operators. They could end up being absorbed by the big bets that are entering the country, but which are new to the characteristics of the national market.

In numbers:

• US$1.5 billion was the gross revenue of the betting market in Brazil in 2022, placing it among the ten largest in the world, according to Entain, one of the largest companies in the sector in the United Kingdom.

• US$5 billion should be the segment’s gross revenue in five years, according to Vixio GamblingCompliance’s calculation.

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Earthquake in Taiwan sparks warning about chips

The strongest earthquake to hit Taiwan in 25 years, which left at least nine dead and 1,011 injured, could also have an impact on the global economy.

Understand: the island is the main producer of advanced semiconductors in the world.

• That’s where TSMC (Taiwan Semiconductor Manufacturing Co.), the largest global chip manufacturer, is located.

The Taiwanese company said after the earthquake that it had removed some employees from its production centers. A spokesperson told Bloomberg that workers are safe and the company is still assessing the damage.

Why it matters: The interruption of factories, even if momentary, could have caused damage. Analysts interviewed by the Bloomberg agency stated that some cutting-edge chips require uninterrupted operations.

↳ This in the context of a global race for ultra-advanced chips so that they run increasingly evolved models of AI (artificial intelligence).

The earthquake: it began shortly before 8am local time (9pm on Tuesday in Brazil) and had a magnitude above 7.

Despite the various damages caused, this Wednesday’s earthquake is far from matching, in terms of number of victims, that of 25 years ago.

In September 1999, a 7.6-magnitude quake killed nearly 2,400 people and prompted Taiwan to review its earthquake building safety rules. For experts, this rigor contributed to reducing the number of deaths now.

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‘Not now, boss’

Can’t stand receiving non-urgent messages or calls outside of working hours? You’re not the only one, and a bill in California wants to stop the practice.

Understand: the text deals with the so-called “right to disconnect”, a term that appeared along with the adoption of home working in several companies during the pandemic.

↳ After the health crisis has passed, some people still complain about the need to always pay attention to the phone to immediately respond to a message from their boss.

Democrat Matt Haney’s bill states that employers and employees would have to establish a written agreement defining work hours.

If management breached this agreement with messages or tasks outside the agreed range three times, they could be reported to the state labor commissioner and could receive fines starting at US$100.

The inspiration came from an Australian law on the subject, which will be implemented later this year. It will allow workers to reject “unwarranted” professional communications outside of regular work hours.

There are those who are against: a representative of San Francisco companies interviewed by the New York Times stated that the current work routine guarantees a better balance between employment and personal life than before the pandemic.

• He argued that a law that establishes a specific working time would not be good for both sides.