Education rises and weapons factory falls on the stock market after Lula’s election

by

Investors on the Brazilian Stock Exchange repeated this Monday (31) a movement of stock rotation already observed last week, giving preference to assets that can be favored with the change of government.

The victory of Luiz Inácio Lula da Silva (PT) in the dispute for the Presidency of the Republic over Jair Bolsonaro (PL) this Sunday (30) caused volatility in the main indices of the local market. At the end of the trading day, the balance was positive. The Ibovespa closed up 1.31%.

Cogna and Yduqs, companies in the education sector, had their shares traded with appreciation of 3.46% and 5.42%, respectively.

Expectations about these assets grow due to PT’s history of including the private sector in higher education expansion policies, as in programs such as ProUni (University for All Program).

“Lula said in his speech that Fies [Fundo de Financiamento Estudantil] and ProUni will come back and this ended up helping the education sector a lot”, commented Ubirajara Silva, manager of Galapagos Capital.

In the opposite situation, Taurus shares ended the day down 4.67%. The arms manufacturer achieved wide appreciation during the administration of Bolsonaro, who is a defender of policies to arm the population.

During the Bolsonarista administration, the number of people with licenses increased by 473% and, from 2018 to the beginning of this month, Taurus shares rose by about 670%.

The first market session after Lula’s victory also showed that the sector believes that the winds will be positive for several sectors potentially benefiting from the increase in family income, such as air transport, tourism and retail.

The airlines Gol and Azul shot up 8.83% and 8.91%. Travel operator CVC advanced 9.63%.

Alpargatas gained 9.04% in view of the perspective of policies aimed at improving income in the country.

Among the campaign promises repeated in the speech after confirmation of the result at the polls, Lula said that he will resume a policy of readjusting the minimum wage above inflation.

There was also a sharp drop in the prices of assets of companies controlled by the government due to the market fear that Lula would interfere and cause losses in state-owned companies.

Petrobras’ preferred shares, which are the company’s most traded on the stock exchange, melted 8.47%. Banco do Brasil shares plummeted 4.64%.

“The market seems to see risk in state companies”, commented Leandro De Checchi, an analyst at Clear Corretora.

In view of the loss obtained by the state-owned companies on the stock exchange this Monday, Banco do Brasil issued a note to state that it will comply with the requirements of the transition process.

“As a member of the public administration, BB has always complied with the legislation that establishes the transition rules between governments. BB maintains its position of providing at this moment all the information that is requested”, informed the note.

with Reuters

You May Also Like

Recommended for you