Opinion – From Grain to Grain: In 2 weeks, Eletrobras shares are already valued more than the one-year FGTS return

Two weeks after the privatization of Eletrobras, workers who used FGTS funds to participate can now celebrate. Eletrobras’ common shares rose 7.86% in this period. This return is superior to more than one year of FGTS profitability.

In privatization, shareholders bought each share at a price of R$ 42. At the close of this Monday, they were traded at R$ 45.3.

According to a survey of analysts, carried out by Bloomberg, the shares would still have the potential to rise by another 19% in the next twelve months. Therefore, the total gain can reach more than 28% in a year.

Added to this expected return, dividend gains are still expected that could add another 4% to expected profitability, according to the average analysts’ assessment.

FGTS investors would need to wait more than five years to obtain the same total return.

In privatization, workers were allowed to use up to 50% of their FGTS reserves to buy shares through a fund called the Fundo Mútuo de Privatização (FMP). The demand was such that there had to be an apportionment and they were only able to apply about 66.7% of what they requested.

The term is still short and any investment in stocks must be evaluated in the long term, due to the inherent risk of variable income. However, starting off on the right foot is always better.

It is important to point out that while investors who participated in the offer by buying shares directly could already pocket this gain of more than 7%, those who participated through FGTS resources must still wait for almost 12 more months.

However, if analysts’ predictions are correct, this wait will be well rewarded.

Michael Viriato is an investment advisor and founding partner of Investor’s House

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