Read this Tuesday’s edition of the FolhaMercado newsletter (15) – 08/15/2023 – Market

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Exchange at Eletrobras

In an announcement that caught the market by surprise, Eletrobras announced on Monday night that Wilson Ferreira Junior had resigned as president of the company.

In his place, Ivan Monteiro takes over, who was chairman of the board of directors, a position that will now be occupied by Vicente Falconi.

Who is who:

• Wilson Ferreira Junior is a respected executive in the energy sector and had already chaired Eletrobras from July 2016 to January 2021. He returned to the position on July 20 of last year, as the first CEO of the privatized company.

• Ivan Monteiro he is a former career employee of Banco do Brasil and managed Petrobras at the end of the Michel Temer (MDB) government, in addition to having been CEO of BRF.

Context: the change of executives takes place at a time when the Lula government (PT), which was opposed to the privatization of Eletrobras, is trying to expand the power of the Union in the company.

A Sheet learned from people who follow the company that Ferreira Jr. had been having a difficult relationship with board members about the best strategy for the company’s future, especially with the government.

In this respect, Ivan Monteiro, who participated in PT administrations, would have better traffic.

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Stations talk about restrictions on diesel

Difficulties for diesel purchases by service stations, especially those with white flags, were confirmed by the federation that represents fuel resellers in the country.

The ANP, the government agency responsible for ensuring supply in the country, said that distributors’ stocks are at adequate levels and that there is no shortage of the product.

Understand: Reports of purchase restrictions and higher diesel prices have emerged in recent weeks and have reignited questions about Petrobras’ new pricing policy.

• At the same time, it discourages private imports at times of great difference between fuel prices here and oil prices abroad.

In numbers: Last week, the average price of S-10 diesel rose by R$0.08 per liter to R$5.08, even without readjustments at Petrobras refineries.

On Monday, the price of diesel at Petrobras refineries was BRL 1.18 per liter below the import parity calculated by Abicom (Brazilian Association of Fuel Importers).

• In the national average, the gap was R$ 1.01 per liter.

• In gasoline, the difference was R$ 0.90 per liter in Petrobras refineries and R$ 0.79 per liter in the national average.

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Stress in Argentina after primaries

The victory of the ultraliberal candidate Javier Milei in the primary elections in Argentina shook the local market, which dawned with a sharp devaluation of the country’s peso and debt securities.

In numbers: the parallel dollar, called “blue”, soared 11% after the country’s Central Bank raised official dollar prices by 22% and raised the interest rate by 21 points (to 118% a year), in an attempt to stimulate investments in pesos.

• The other types of official dollar quotations in Argentina –there are ten in all– also rose.

• In New York, the value of Argentine debt bonds plummeted 12%. On the other hand, the Merval index, the main one of the Argentine Stock Exchange, closed up 3.30%.

Which explains: part of the market reacted badly to the result of the primaries due to the uncertainty surrounding Milei’s proposals.

• Its main flag is to dollarize the economy, through a system of free competition between currencies, and then eliminate the Central Bank.

• Specialists warn that this would be very difficult in a country that does not have dollar reserves.

Milei received 30% of the vote with 97% of the ballots counted, followed by the opposition coalition Juntos por el Cambio, with 28.3%. The Peronist and government alliance União pela Pátria came in third, with 27.2%.

The economist proposes a list of measures that include making a “unilateral trade opening” to the world, focusing on investments in the areas of mining, hydrocarbons and renewable energy, and reducing 90% of taxes.

• Learn more about who the self-styled anarcho-capitalist is here.

Analysis: Even if Milei does not win the election ahead, the Argentines’ initial impulse will be to buy dollars as soon as possible, fueling their quotation and inflation, writes special reporter Fernando Canzian.

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Sour signals from the East send down stock exchanges

Once again, the fear of a slowdown in the Chinese economy weighed on the Brazilian stock exchange, which reached its tenth consecutive fall, in the biggest negative sequence since 1984.

• This time, the real estate sector again raised concerns after a large developer failed to pay interest on the debt.

• The news hit the shares of Vale, a supplier of raw materials for civil construction and one of the largest companies on the Ibovespa index..

In numbers: mining shares fell 3.08% and pulled the Brazilian Stock Exchange down, with a retreat of 1.06%, to 116,809 points.

• The global fear about the Chinese economy also made the dollar gain strength here and abroad. The American currency closed at R$ 4.965, up 1.20%.

Still on this Monday, highlight for the shares of education traded on the Stock Exchange.

They had a sharp drop in the midst of an impasse in the sector after a decision by the STF that limited the opening of new medical courses and, as shown by the Sheetgenerated uncertainty in the Ministry of Education.

• Yduqs and Ânima, two of the main private medicine courses, dropped 15.25% and 18.96%, respectively.

What explains the negative sequence of the Ibovespa: it is a mixture of the external scenario and the Copom minutes, which cooled the bets in the market for a cut greater than 0.5 point of the Selic.

Despite the sequence of negative days, the drop is not that big: 4.2%. This after a breakthrough of 19.7% in four months while waiting for the interest rate cut cycle to begin.