Merchant at BNDES, State-Owned Companies Law, first names of Haddad’s team and what matters in the market

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Merchant at BNDES and the State-Owned Companies Law

Mercadante at BNDES, Galípolo and Appy at Fazenda, and the market’s reaction to these indications. Tuesday was full of news in Brasilia that spilled over to Faria Lima. See more details of the choices:

Aloizio Mercadante he is a former minister and former senator and was announced for the development bank by president-elect Luiz Inácio Lula da Silva (PT). Find out more about his trajectory here.

The president also declared that “privatization will end in this country”.

Market disliked: the sign of rejection of the name already appeared the day before, when news pointed to this outcome.

• The Ibovespa even rose 1%, but after Mercadante’s announcement at the BNDES, the pace was reversed and the Stock Exchange closed down by 1.71%🇧🇷 The same movement happened in the dollar, which fell 1%, but closed practically stable.

• The appointment of PT politicians seen as more favorable to the expansion of public spending to command strategic areas of the economy has caused discontent among investors.

Indication may come up against the law: as the former minister participated in the election campaign of the president-elect, he could not assume the position at the BNDES according to the current version of the State-Owned Companies Law, says Sylvio Coelho, who coordinated the drafting of the legislation in 2016.

Yes but…The Chamber of Deputies approved on Tuesday night a project that changes the State-owned Law to reduce to 30 days the quarantine of nominees to occupy high-ranking positions in public companies.

• Today, the law prohibits the appointment of people who have acted, in the last 36 months, as a participant in the decision-making structure of a political party or in work linked to the organization, structuring and carrying out of an electoral campaign.

• The project removes the 36-month forecast. Ie, if the law is sanctioned, Mercadante will be released to lead the BNDES. The text still needs to go through the Senate.

The future finance ministerFernando Haddad, announced this Tuesday two names for his team:

Mixed reactions: Appy’s nomination received much praise from market analysts, for his knowledge of the tax issue.

Gallípolo’s appointment, however, provoked a more neutral assessment. Analysts have reservations about a more developmental thinking attributed to him.

“Bite and blow”: still on the market, the assessment is that Haddad, on the one hand, will continue with signs of increasing spending, while at the same time indicating that he will seek to hold the trajectory of the public debt.

Opinion:

SAF: the green aviation fuel

Responsible for about 3% of global emissions and the target of criticism from environmentalists, commercial and corporate aviation is rushing to find less polluting alternatives.

The most promising one seems to be the SAF (Sustainable Aviation Fuel), but that still only represents 0.1% of the total amount of fuel used in the world by airplanes.

Understand: the fuel is made from oils from plants such as palm and castor beans, and from organic waste, including discarded vegetable oils.

• In addition to polluting 80% less than kerosene, SAF is emerging as a more viable clean alternative because it can be used in current aircraft engines, without major adaptations.

What stops progress:

• Price: each liter of SAF costs 2.5 to 5 times more than QAV (aviation kerosene).

• Difficulty expanding offer: setting up a factory takes three to five years, and there is doubt as to whether there is enough biomass to produce on a large scale. Billions of tons per year would be needed – today we have not reached the million mark.

In numbers: the industry’s plans for the SAF are ambitious. The idea is that production reaches 2% of the market in 2025 and fuel becomes the standard by 2050.

Aware of SAF limitationsAirbus, the largest aircraft manufacturer in the world, is also betting on other alternatives to achieve the goal of being net zero (neutralizing its pollutant emissions) by 2050.

• These include green hydrogen and aircraft electrification, options that have the disadvantages of taking up too much space or weight on aircraft.

Brazilians injured by FTX

Crypto brokerage FTX, which filed for bankruptcy earlier this month and had its founder and former CEO arrested this Monday (12), had Brazilian investors among its more than 1 million customers.

BBC News Brasil located some of them, who commented on the feeling of seeing part of their assets turn to dust overnight. See testimonials:

Antonio (fictitious name):

• “It was all I had. I stayed at zero”, says the chef in Santa Catarina, who had sold the house to invest in cryptocurrencies.

• 🇧🇷[Nos primeiros sinais de que a empresa não iria honrar os saques] I tried to transfer the money, but nothing was transferred. Then despair took over, right? My God… it’s not even good for me to think again. It was not easy”.

André Fauth:

• “We don’t suspect until we actually get to reality. The appearance of the FTX group was something strong, solid. They rescued companies that were going bankrupt. FTX had a market value of R$ 32 billion, I would never have imagined that there was risk for the money there”.

• He has a YouTube channel about investing in cryptos and reports that he has lost the equivalent of BRL 1 million in FTX investments.

Nelio Castro:

• 🇧🇷[A corretora] was listed among the three largest in the world. There were several expert recommendations. Furthermore, the interface was very smooth to operate. Fees were zero for operations with ethereum and bitcoin. And the transactions there were very fast.”

• He claims he lost $10k (approximately BRL 52 thousand).

this tuesdayUS prosecutors reported eight fraud charges against Sam Bankman-Fried, the platform’s former CEO.

• They said he took money from FTX clients to fund Alameda Research, a company in which he was a majority partner.