The dollar was only moderately high against the real on Monday (9), even after supporters of former President Jair Bolsonaro stormed the headquarters of the Three Powers in Brasilia, with investors citing the solidity of Brazilian institutions as an anchor for confidence. of the market in the country.
At 9:15 am (Brasília time), the spot dollar advanced 0.52%, to R$ 5.2638 in the sale. On B3, the dollar futures contract for the first month rose 0.56% to R$5.2895.
At 9:11 am, the Ibovespa futures with shorter maturity, for February 15, retreated 0.88%, to 109,650 points.
Investment analysts interviewed by Sheet point out that acts of vandalism give a new dimension to the ongoing political tension in the country and tend to scare away foreign capital. For representatives of the financial market, “caution and observation” are still necessary, but it is undeniable that the image that remains for investors is negative.
“Investors are not used to this type of event, of a political nature – and neither are we, actually,” Nicolas Borsoi, chief economist at Nova Futura Investimentos. “It conveys a very bad image of the country’s situation and may scare away foreign investors, who invest in the stock market.”
“It is negative for Brazilian assets, because it means that there is something very wrong with politics, which did not find peaceful alternatives and let the scenario reach this level”, says Borsoi.
“This increases political uncertainty, you have to see what the government’s reaction will be,” he says. “Investors should demand a higher risk premium, there will be a negative market reaction this Monday [9]”, says Borsoi, betting that investors should “run to the dollar.”
“On the stock exchange, all sectors should be affected. It is a systematic risk, which especially affects assets more linked to the domestic cycle, such as the real estate sector, retail, rental companies and banks”, he says.
Ilan Arbetman, an analyst at Ativa Investimentos, agrees. “When you think of Brazil, one of the arguments for attracting capital is that we have relative stability in relation to other emerging markets”, he says. “Now the stock market and the dollar are going to tell us how much events like this Sunday compromise this image.”
Arbetman recalls that the price of a share is calculated by the expected cash flow on the interest rate. “We tend to see the stock exchange pricing the increase in the level of risk”, he says, noting, however, that the invasions on Sunday do not interfere in the operational dynamics of the companies. “We are going to have negative impacts, but we don’t know how long they will last,” he says.
In the opinion of Piter Carvalho, chief economist at Valor Investimentos, the moment is one of observation to see how the government will act to control these demonstrations. “There is a fear that they could spread throughout the country, including blocking roads, repeating the scenes we saw in the elections”, he says.
“If the movement gains strength and blocks the roads, it slows down the economy and generates negative impacts on several companies, which depend mainly on the highways”, he says.
On Friday (6), the dollar closed at a low and not only zeroed the accumulated appreciation during the week, but also started to show a drop in relation to the real in the first week of 2023. The Exchange was closer to zeroing out the accumulated losses at the beginning of this year.
The improvement in the Brazilian market took place after President Luiz Inácio Lula da Silva’s (PT) speech at the opening of the first ministerial meeting of the current government, and the release of the employment report in the United States.
The spot commercial dollar fell 2.13% this Friday (6), to R$ 5.2370 on sale. In the week, the American currency retreated 0.7% against the real. The Ibovespa closed up 1.23%, at 108,963 points. The index ended 2022 at 109,734 points.
Interest rates also dropped. For contracts maturing in 2024, the rate dropped from 13.70% at the close of the day before to 13.59%. Longer maturities ended the day with interest below 13%. For 2025, rates rose from 13.12% the day before to 12.85%. And at maturity in 2027, the drop was from 13.05% to 12.79%.
With Reuters
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