Reactions to the exchange at Petrobras, preview of May inflation and what matters in the market

ANDsta is the edition of the FolhaMercado newsletter for this Wednesday (25). want to receive it from monday to Friday at 7 am In your email? Sign up below.

The market reaction to the exchange in Petrobras

Petrobras shares tumbled 3.6% on the Brazilian Stock Exchange and 13.6% in the American this Tuesday (24), the day after another exchange promoted by the government in charge of the company.

The state-owned shares went against the Ibovespa, which closed slightly higher of 0.21%.

Must not change: despite the exchange, analysts and managers heard by the Sheet believe that Petrobras’ statute and the State-Owned Companies Law will bar any attempt by the government to change the oil company’s pricing policy.

• The opinion is that the musical chairs sequence hinders the company, but the practical effects of the exchanges carried out so far have been almost nil.

• They claim that a longer interval between readjustments was already on the radar and may become clearer from now on.

lag: the difference between the cost of importing fuel to Brazil and the prices charged by Petrobras was once much higher, but it has decreased with the fall in the dollar in recent days. Today it is on average R$ 0.10 per liter for gasoline.

Government puts up locks: Planalto is also studying two measures that would, in practice, be a way of interfering with Petrobras’ pricing policy:

• Establish ranges for the international price of oil – and, if the price of a barrel varies within the delimited values, the company could not make adjustments.

• Create a minimum interval of 100 days for readjustments – which would have avoided part of the latest increases announced by the company.

More about musical chairs at Petrobras:

‘Remedies’ in the Carrefour-Big business

Cade (Administrative Council for Economic Defense) must authorize the sale of Big to the Carrefour group, but impose the sale of part of the 388 stores involved in the deal.

The number and locations of these stores are kept confidential. The judgment of the antitrust authority takes place this Wednesday (25).

Who is who:

• Big: was the sixth largest in the country in terms of revenue last year, with BRL 25.2 billion. It has six brands: Maxxi, Sam’s Club, Big, Super Bompreço, Nacional and TodoDia.

Remember: the purchase was announced in March last year, by BRL 7.5 billion.

• In addition to the acquisition of stores, the operation also marks the geographic expansion of the Carrefour group, which has a greater presence in the Southeast region, while Big stores are primarily in the South and Northeast.

• The deal takes place at a time of rapid expansion of the wholesale market, whose main rival to Carrefour is Assaí, which also belongs to French Casino.

End of charge for suitcase goes to sanction

The text that prohibits the charge for checking baggage on national and international flights is going to be sanctioned by President Jair Bolsonaro (PL) after being approved by the Chamber on Tuesday.

Understand: the MP device provides for the end of the charge for checking bags up to 23 kilos on domestic flights and up to 30 kilos on international flights. The measure has been in effect since 2016 by a resolution by Anac (National Civil Aviation Agency).

Government vetoes: the Panel column showed that the Ministry of Infrastructure articulates with the Civil House the president’s veto of this part of the MP.

• They also claim that the entry of “low cost” companies, which would increase competition, is conditioned to the charge for checked baggage.

Remember: Congress had already approved in 2019 the end of the charge for checking bags of up to 23 kilos on aircraft with up to 31 seats, but the measure was vetoed by Bolsonaro.

The PM: the text allows the construction of airfields without prior authorization and authorizes companies to bar undisciplined passengers for up to one year.

• The measure also simplifies the authorization for the operation of foreign companies and with the requirement of CNPJ and branch in Brazilian territory.

Inflation preview slows down, but still a concern

The IPCA-15, prior to the country’s official inflation, decelerated to a high of 0.59% in May, against an advance of 1.73% in April, according to the IBGE.

In numbers: the result came a little higher than expected by analysts, who estimated a rise of 0.45%. The 12-month period was 12.20%the highest rate for the index since November 2003.

What pulled up: the biggest impact came from pharmaceuticals, with an increase in 5.24% in prices in view of the readjustment authorized by the government in April.

• Another highlight was the transport group (1.80%). Weighed the prices of airline tickets (18.4%) and the advance of 2.05% of fuels, which decelerated in relation to the 7.54% of the previous month.

What pulled you down: by the way it is measured, this was the first IPCA-15 to take full relief in the electricity bills with the end of the “water scarcity” flag.

• Electricity fell by 14.09%leading the Housing group to a deflation of 3.85% in the month.

What the analysts say: although inflation appears to have peaked in April, that does not mean that consumers will feel relief in their pockets anytime soon.

• The mirroring of inflation by the basket of items, measured by the diffusion index, remains a cause for concern, because it makes price increases more persistent and difficult to combat.

More on inflation: