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MarketScreener Homepage  >  Equities  >  Bolsa de Valores de Sao Paulo  >  Petróleo Brasileiro S.A. - Petrobras    PETR4   BRPETRACNPR6

PETRÓLEO BRASILEIRO S.A. - PETROBRAS

(PETR4)
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Brazil markets plunge as Bolsonaro shakes up Petrobras to cut energy costs

02/22/2021 | 09:45am EST

BRASILIA, Feb 22 (Reuters) - Brazilian financial markets went into a tailspin on Monday, as investors dumped the country's currency and stocks, while pushing up interest rates, after President Jair Bolsonaro moved late on Friday to sack the head of state-run oil firm Petrobras after weeks of clashes over fuel price hikes.

The right-wing populist's intervention in one of Brazil's most valuable companies, along with a vow to reduce prices in the power sector too, cast growing concern on the government's commitment to free markets.

Several brokerages downgraded Petroleo Brasileiro SA, as Petrobras is formally known, and Bank of America cut Brazilian stocks to 'marketweight' in its Latin American portfolio, excluding Petrobras and state power company Eletrobras entirely.

"Today is a pretty ugly day," said a hedge fund trader in Sao Paulo. "The big concern now is if Bolsonaro's decisions are going to be limited to public companies, or if he is going to spend more without reforms."

Petrobras preferred shares and common shares both plunged around 20% in early trading on Monday, wiping more than 60 billion reais ($11 billion) off the company's value. Some 28 billion reais was wiped off the firm's value on Friday.

The Bovespa index fell over 5% in early trading, with preferred shares in Centrais Eletricas Brasileiras , as Eletrobras is formally known, down almost 8%.

The real fell 2.5% to a three and a half-month low of 5.53 per dollar, bringing its losses against the dollar so far this year to 6%.

Ignoring the Libyan dinar's one-off devaluation in early January, the real is one of the worst-performing currencies against the dollar in the world so far this year, according to Refinitiv data on 152 currencies.

Interest rate futures also surged on Monday. The January 2022 contract jumped almost 20 basis points to 3.61%, a level not seen since May last year.

Brazil's credit default swaps (CDS), effectively the cost of insuring against sovereign default, jumped 22 basis points to 185 bps, the highest in over three months.

Bolsonaro defended his decision to replace Petrobras Chief Executive Roberto Castello Branco with a retired army general with no oil and gas experience, insisting on Monday that recent fuel price hikes were hurting the Brazilian people.

"It is my right to renew (his tenure) or not. It will not be renewed. What's the problem? Some people in financial markets are very happy with a policy that only ... serves the interests of certain groups in Brazil," he told supporters outside the presidential palace.

Over the weekend, Bolsonaro cast rising energy prices as an attack on him and vowed to reverse the trend.

He said on Monday there was room to cut fuel prices 10% by reducing taxes and profits for fuel distributors.

A survey of institutional investors by online brokerage XP Investimentos released over the weekend showed that 57% of investors now think the government's formal spending cap will be broken this year, up from 32% last month.

A growing number of investors also think Economy Minister Paulo Guedes, a committed free-marketeer, will not last in his post beyond June. (Reporting by Jamie McGeever Additional reporting by Paula Laier, Tatiana Bautzer and Luciano Costa in Sao Paulo, Lisandra Paraguassu in Brasilia Editing by Brad Haynes and Steve Orlofsky)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
CENTRAIS ELÉTRICAS BRASILEIRAS S.A. - ELETROBRÁS -0.64% 32.63 End-of-day quote.-11.81%
IBOVESPA -2.50% 112379.62 Delayed Quote.-3.14%
PETRÓLEO BRASILEIRO S.A. - PETROBRAS 0.77% 22.39 End-of-day quote.-21.00%
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Financials
Sales 2021 364 B 63 573 M 63 573 M
Net income 2021 43 911 M 7 659 M 7 659 M
Net Debt 2021 299 B 52 089 M 52 089 M
P/E ratio 2021 8,79x
Yield 2021 3,46%
Capitalization 290 B 50 667 M 50 511 M
EV / Sales 2021 1,61x
EV / Sales 2022 1,40x
Nbr of Employees 49 050
Free-Float 64,3%
Chart PETRÓLEO BRASILEIRO S.A. - PETROBRAS
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Petróleo Brasileiro S.A. - Petrobras Technical Analysis Chart | MarketScreener
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Technical analysis trends PETRÓLEO BRASILEIRO S.A. - PETROBRAS
Short TermMid-TermLong Term
TrendsBearishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 8
Average target price 28,83 BRL
Last Close Price 22,39 BRL
Spread / Highest target 66,6%
Spread / Average Target 28,8%
Spread / Lowest Target 7,19%
EPS Revisions
Managers and Directors
NameTitle
Roberto da Cunha Castello Branco President, Chief Executive Officer & Director
Andrea Marques De Almeida Chief Financial & Investor Relations Officer
Eduardo Bacellar Leal Ferreira Chairman
Marcelo da Silva Carreras Head-IT & Telecommunications
Marcia Tosta Head-Cyber & Information Security
Sector and Competitors
1st jan.Capitalization (M$)
PETRÓLEO BRASILEIRO S.A. - PETROBRAS-21.00%50 771
SAUDI ARABIAN OIL COMPANY2.00%1 907 502
ROYAL DUTCH SHELL PLC24.07%163 968
TOTAL SE16.08%128 173
PETROCHINA COMPANY LIMITED27.08%118 145
GAZPROM5.95%71 531