Record dividends in 2021, quiz of the week and what matters in the market

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Quiz: the week at the markets

The shortest week in Brazil because of Carnival had the economic news marked by the war in Ukraine. Take the quiz to find out if you’re up to date on what’s happened in the last few days:

B3 may receive BRL 7 billion from the Russian stock exchange

In a beginning of the year marked by the strong flow of foreign money to the Brazilian stock exchange, other BRL 7 billion of these resources may come to national assets as a reflection of the war in Ukraine.

Understand: global stock indices provider MSCI took the Russian market off the benchmarks dedicated to emerging markets. This means that funds that passively follow this benchmark must take their resources from there and allocate them to other similar economies.

This move would bring to Brazilian assets BRL 6.7 billionaccording to calculation by Itaú BBA.

why it matters: in the first two months, foreigners entered the stock exchange with BRL 62.6 billion. The balance represents an increase of 130% compared to the same period in 2021.

With the gringos wanting to take advantage of cheap assets and the rise in commodity prices, this flow has sustained the Ibovespa’s advance this year, against the main indices abroad.

Thursday at the markets: with the basic materials index reaching its maximum since 2008, the real continues to appreciate. The dollar fell 1.56%, the BRL 5.03. The Ibovespa closed practically at zero to zero, at 115,165 points, without following the fall abroad.

More about the war:

Record dividends in 2021

Driven by Vale, Brazilian companies distributed record dividends in 2021, according to a report by manager Janus Henderson Investors.

In numbers: the country’s companies distributed a total of $25.4 billion (R$128 billion) in dividends in 2021, compared to US$9.4 billion (R$47 billion) in the previous year.

Almost half (US$ 12.4 billion, R$62 billion) of the total distributed in 2021 came from Vale. Next comes Petrobras, with $7.7 billion (R$ 39 billion) of profits transferred to shareholders.

What explains: in addition to the two companies being the most valuable on the Brazilian stock exchange, they surfed at a time of high commodities in 2021 (in this case, iron ore and oil) and devaluation of the real against the dollar, which helped to increase the companies’ revenues .

The banking sector, another well-known for large dividend payouts, also contributed to the 2021 record after being forced to limit its payouts in the 2020 pandemic.

Here comes more: after the amount distributed last year, Petrobras has already announced another R$ 37.3 billion to be passed on to shareholders referring to the result of the last quarter of 2021.

The state-owned company changed its distribution policy last year, when it reached its goal of reducing gross debt to US$ 60 billion (R$ 300 billion) in advance.

take a break

The sanctions imposed by the West on Russia in retaliation for the attack on Ukraine have specific targets: the local financial system, the assets of President Vladimir Putin and his oligarchic allies.

Understand: these billionaires mostly became rich after the fall of the Soviet Union in 1991, and many of them supported Putin’s rise to power more than 20 years ago.

To circumvent current or future sanctions, they have protected their assets, such as yachts and jets, in places without an extradition treaty with the US or other countries.

to understand more on Putin’s rise to power and the role of oligarchs:

• “The Putin System”: French documentary, released 15 years ago, seeks to profile the Russian president. It demonstrates how Putin uses oil and gas exports as geopolitical weapons to assert his influence over the world. On Amazon Prime Video.
• “Red alert” – How I Became Putin’s Enemy Number One: book by Bill Browder, who began his financial journey in Russia shortly after the fall of the Soviet Union. There, he found shocking cases of corruption in the country – and went on to expose it all. (Intrinsic, trans. Marcelo Levy, BRL BRL 49.90, 408 pages).
• “Once Upon a Time in Russia”: The Rise of the Oligarchs” (“Once Upon a Time in Russia: The Rise of the Oligarchs” – Ben Mezrich, experts on billionaires, tells the behind-the-scenes of the growth of the fortunes of the main Russian oligarchs. Book in English available on Amazon (ebook R$ 51).

In addition to the economy:

• Breakfast: what is Russia’s military tactics in the invasion of Ukraine; listen to podcast.
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• Sheet Guide: ‘Batman’ with Robert Pattinson opens in theaters; learn how to watch 10 hero movies.