Panel SA: With Lula’s victory, Estácio’s network expands distance learning

The campaign promise made by the president-elect, Luiz Inácio Lula da Silva, to strengthen the Fies (student financing program) in his government, caused the shares of Yduqs, the controlling company of universities such as Estácio and Ibmec, to skyrocket.

From the first round until the days that followed the election that confirmed Lula’s victory, Yduqs gained R$ 695 million in market value, becoming worth around R$ 5 billion.

In the wake of the good moment for the education sector, the group will announce a new distance learning center in Lavras do Sul (RS) as part of its expansion to cities in the interior.

According to the company, its total enrollment in all modalities and units reaches 1.3 million students. There are still no projections for the variation of this number in the next year.

Yduqs shares, however, fell again after statements by Lula stressing that his government will be more concerned with social matters.

The market understood that his speech was a sign of more spending on benefits, which would lead to a fiscal imbalance in his government. The result was a sharp drop in the stock market and a rise in the dollar. Since then, the stock market has sought accommodation.

The company also suffered from this stampede of investors “frightened” by the new government. Between November 7th and the second (14th), Yduqs lost about R$ 658 million in its market value – practically what it had valued during the election campaign.

In the assessment of Mario Tomadon, a partner at AFS, BTG’s investment arm, the company’s shares may fluctuate until the new government’s plans for the economy are defined.

“While the government does not define how the fiscal policy will be, who the ministers will be, all that, the market will be a little volatile,” said Tomadon.

Julio Wiziack (interim) with Paulo Ricardo Martins and Diego Felix