Senate approves ICMS ceiling, Embraer’s bets to get out of loss and what matters in the market

ANDsta is this Tuesday’s edition of the FolhaMercado newsletter (14). want to receive it from monday to Friday at 7 am In your email? Sign up below:

Senate approves ICMS ceiling for fuel and energy

The Senate approved this Monday the project that places a ceiling of 17% to 18% for ICMS rates on fuel, energy, telecommunications and transport.

The proposal had amendments and, therefore, needs to be analyzed again by the Chamber before going to sanction.

Understand: parliamentarians say they are based on the understanding of the STF that limits the incidence of ICMS above 18% for essential items. The project gives this classification to fuels, energy, telecommunications and transport.

• The approval is a defeat for the governors, who speak of revenue losses of up to R$83.5 billion annually and ask for reimbursement from the government.

• The project, however, provides for compensation only when the drop in collection exceeds 5% compared to last year.

In numbers: it is estimated that the approval of this project and of two other PECs that deal with fuels, still without a voting date, could reduce the price of a liter of gasoline by BRL 1.65 it’s from BRL 0.76 in the liter of diesel.

More on energy and fuel inflation:

• Energy costs account for 31% of the price of bread and 26% of beer; see list.

Embraer’s bets

Embraer is betting on the executive jet market, on smaller models for commercial aviation and on its “flying cars” to return to profit and not be swallowed up by the giants Boeing and Airbus.

Understand: the company’s greatest potential, according to the CEO, Francisco Gomes Neto, to the Financial Times, is to increase the revenue of the commercial aviation division.

• The manufacturer bets on its expertise: the regional transport jets, which usually have up to 120 seats, operate shorter distances and are popular especially in North America.

Other bets:

• The queue of millionaires to buy jets in the country, recorded by Sheetalso benefits the manufacturer’s business, which expects to sell up to 110 units in 2022, compared to 93 in 2021. The Brazilian already registers orders for the second half of 2024.

In numbers: after seeing your actions soar 45% and being the company that most appreciated in 2021 among those that make up the Ibovespa, Embraer accumulates a fall of 55% in the current year.

Persistent inflation sinks stock markets

The fall of the world’s main stock indices, the strengthening of the dollar against other currencies and the bleeding in the crypto market marked a very sour start to the week for investors.

In numbers: the Brazilian market was not immune to the global bad mood. the dollar rose 2.48%a BRL 5.11the highest value in a month, while the Ibovespa fell 2.73%to 102,598 points, registering losses in the year.

• In the US, the S&P 500 plunged 3.88%while Dow Jones (-2.79%) and Nasdaq also suffered (-4.68%). Among cryptos, bitcoin and ethereum plummeted 16% and 17%respectively, on Monday night.

What explains:

Inflation: the American consumer price indicator, released on Friday (10), came above market expectations and made analysts put a high of 0.75 percentage point for this Wednesday (15) Fed meeting.

• An advance of this size in the US interest rate has not happened since 1994 and would reinforce the feeling of aversion to risk that penalizes stock markets and emerging currencies, such as the real.

China: the country resumed restricting the movement of people after a new rise in Covid cases in Beijing and Shanghai. The measure creates new obstacles in the country’s logistics centers and ends up putting pressure on the prices of items sold worldwide.

Crypto Crisis: the blow was even greater in digital currencies. Celsius, which functions as a sort of bank for this market, has frozen withdrawals and transfers citing “extreme” conditions.

• The damage hit Binance, one of the largest crypto exchanges in the world, which went hours without allowing redemptions. All of this came to bitcoin, which dropped to US$ 22 thousand (R$ 112 thousand), the lowest level since the end of 2020.

Carrefour predicts BRL 2 billion to integrate Big

Carrefour plans to invest BRL 2.1 billion in the transformation of around a third of the stores of the Big group to brands of the French group.

Remember: the acquisition of BRL 7.5 billion was announced in March 2021 and received approval from Cade at the end of last month.

• The operation marks the geographic expansion of the Carrefour group, which has a greater presence in the Southeast region, while the Big stores are mainly in the South and Northeast.

In numbers: of the 374 stores acquired, 122 will be converted into Carrefour brands. Most of them (70) will turn into Atacadão.

• The decision makes sense at a time of rapid expansion of the wholesale and also because the brand has higher margins (from 7% to 8%) than those registered by Big and Maxxi Atacado (from 4% to 6%).

• Carrefour also bets on Sam’s Club, a shopping club with imported products and in which only members can consume. Seven of the acquired units will be converted to this format, which has margins of 10% to 11%.