Chip wars, Nobel economics winners and what matters in the market

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chip wars

The US decision to ban the export of technology to a number of Chinese chip-making companies, taken last Friday (7), continued to rock markets on Monday (10).

The shares of the main companies in the sector plummeted on the Hong Kong Stock Exchange and had a total loss of market value of $8.6 billion (R$45 billion), according to the Financial Times.

Understand: the decision announced by the US tries to close the siege to the production of chips by China. The US government announced that 31 companies from the Asian country were included in a commercial list of “unverified” companies.

In practice, the measure should lead to an export ban for companies on the list of semiconductor chips and equipment for their manufacture. Among the companies is the memory chip maker YMTC, one of the industry leaders in the Asian giant.

As the columnist of the Sheet Tatiana Prazeres, semiconductors are by far China’s main import item. Most of them come from Taiwan, a territory that is at the center of geopolitical attention.

why it matters: The importance of semiconductor chips to global industry was evident during the height of the pandemic, when excess demand for electronics and logistical chaos hampered the production of video game consoles, computers and especially cars.

The disorder of the pandemic and the market’s dependence on semiconductors that come from the Taiwanese TSMC (concentrates 95% of global production) motivated the great powers (USA, China and the European Union) to further subsidize the home production of these components.

  • That’s why the US wants to limit Chinese manufacturing, in a decision that ended up affecting US companies in the sector and even TSMC, writes columnist Nelson de Sá.

The Nobel Prize Winners

The chairman of the Federal Reserve (US central bank) during the 2008 financial crisis, Ben Bernanke, won alongside fellow Americans Douglas Diamond and Philip Dybvig the 2022 Nobel Prize in Economics for their research on the banking sector and financial crises. .

“The laureates have created a foundation for our modern understanding of why banks are needed, why they are vulnerable and what to do about it,” John Hassler, a member of the committee that organizes the award, said in an announcement on Monday.

Understand: they are students of the theory of bank runs. She argues that banks and the financial system as a whole are only safe if financial institutions are well regulated – an example is guarantees on deposited money.

In times of systemic crisis, financial guarantees can prevent bank account holders from rushing to withdraw their reserves. This situation could generate a domino effect, starting with bank failures and ending in deep economic crises.

Crisis of 1929 x 2008: The collapse of the banks was pointed out by Bernanke as one of the main reasons for the American depression of the 1930s.

  • In response to the 2008 crisis, many governments used public money to avoid the failure of large banks, which generated criticism from part of society.
  • Diamond, one of the winners, said that if the failure of the American bank Lehman Brothers, in 2008, had been avoided, the crisis at the time would have been smaller. At the time, however, Bernanke said there was no legal way to save Lehman.

The winners:

  • Diamond has been a researcher on financial crises and liquidity and has been a professor at the University of Chicago since 1979.
  • Philip Dybvig, 67, is a professor of banking and finance at Washington University in St. Louis.

Nobel that is not Nobel: the prize for economic sciences is the only one that was not part of Alfred Nobel’s (1833-1896) will. Find out who the Swedish engineer and chemist was here and see the winners of the other categories here.


Cosan has another negative day

In the second trading session since Cosan announced its plans to become one of Vale’s largest shareholders, Rubens Ometto’s holding lost almost BRL 5 billion in market value.

The value considers the fall in shares on Friday (-8.72%) and this second (-7.51%).

Understand: Market analysts question Cosan’s strategy, which on other occasions has taken over the operation of companies it has acquired – unlike its stake in Vale, in which it will be one of the major shareholders of a company outside its area of ​​operation.

The holding company has stakes in the oil and gas (Raízen and Comgás), transport (Rumo), renewable energy (Raízen) and carbon credits sectors and considers the acquisition of Vale as part of its objective to diversify its business.

In numbers: Cosan has already acquired 1.5% of Vale’s capital and, through derivatives, will buy another 3.4%. The idea is to get a slice of 6.9% in the mining company, in a process that, at current prices, would be worth around BRL 22 billion.

  • To get an idea of ​​the size of the operation, Cosan’s market value this Monday was around BRL 28 billion.

What the analysts say:

  • “Movement is too complex for the benefits it can bring,” wrote the experts at Ativa Research.
  • “The transaction is very large and should put pressure on the group’s shares due to the risk of issuing new shares, in addition to negatively impacting the company’s credit risk”, said analysts at Guide Investimentos.

What Cosan says:

  • “We are going to come in to add up and guarantee that the company and the executives will have the necessary resources, the necessary alignment in relation to leveraging all the possibilities that Vale’s portfolio allows”, said the company’s president, Luis Henrique Guimarães, in a conference call on Friday. .

Double-digit fuel lag

The gap between domestic fuel prices and international prices reached double digits this Monday, amid pressure from the government for Petrobras not to readjust prices during the election period.

In numbers: at the opening of the market, the average price of gasoline in Brazilian refineries was BRL 0.36 per litre, or 10%below import parity (understand the concept here).

  • In the case of diesel, the difference was BRL 0.75 per litre, or 13%. The numbers are from Abicom (importers association).
  • On Monday night, the Brent barrel, a reference for Petrobras, fell 0.6%at US$ 95.62 (R$ 496).

The Mataripe Refinery, the only one that is not controlled by Petrobras, decided to pass on, on Saturday (8), the rise in prices. The price of gasoline rose in 9.7% and the diesel S-10, in 11.3%. The refinery is controlled by the Arab Mubadala fund.

What explains the rise in oil: quotes had been falling in recent months reflecting the fear of a global slowdown as a result of high interest rates.


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