On a steady rise since the beginning of the day, the Ibovespa resumed today the mark of 117 thousand points in a movement that was highlighted by the jump in Vale’s shares. The mining company’s share buyback program encouraged investors, who also saw a more favorable climate for risky assets worldwide and a less tense environment in Brazil’s political arena.
With this combination, the Ibovespa closed up 1.97%, at 117,518 points, very close to the day’s high of 117,668 points. The financial turnover was R $ 19.4 billion.
The day was very favorable for risky assets around the world, after data from the US labor market and services sector. With the world’s largest economy gaining traction, investors are more comfortable looking for stocks and assets at cheap prices. Here, in Brazil, favorable winds helped from actions in the education sector to construction companies, tourism and aviation – which were severely penalized throughout the pandemic. “Some sectors were in limbo, like education, for example. And with that impulse from abroad, he ended up having a little more purchases ”, says a manager.
Internally, the news around the 2021 Budget seems less negative, under the expectation that President Jair Bolsonaro will vet excerpts from the proposal already approved in Congress. Although there is still caution on the subject of the Budget, a manager says that the Minister of Economy, Paulo Guedes, reiterated the signal that the government and the Legislature are talking and that an understanding is moving in the right direction. “He is trying to show that there is an alignment”, says the professional, while pondering, however, that the topic still raises concern at this moment
On the other hand, political risk is still very present in the market, mainly around state-owned companies. Both in the case of Banco do Brasil and Petrobras, there is a certain distrust among investors about the direction of the companies, due to the concern with government interference. Banco do Brasil ON saw a slight decrease of 0.13% after the resignation of the Chairman of the Board, Hélio Magalhães. Petrobras ON rose 1.06% and Petrobras PN gained 0.63%.
The distrust surrounding Banco do Brasil has been worsening since the beginning of the year, with the resignation of then president André Brandão and, now, the departure of board members. Today, the new president of the institution, Fausto Ribeiro, said that Banco do Brasil “is from the market and is from Brazil”.
According to a manager who chose not to be identified, Banco do Brasil’s shares have already operated under the weight of market distrust, but the statement does nothing to turn this around. “It remains to be seen, again, that it is a company with a social purpose, in the wake of what Bolsonaro has already been saying. Although it is not a direct sign of what is going to happen, it seems to go in the same way as Bolsonaro’s posture ”, he says.
Today, a good part of Ibovespa’s positive performance and financial turnover was supported by Vale’s shares. The common share closed up 6.16% with a volume of R $ 3.6 billion. By far, it was Ibovespa’s largest business turnover – Petrobras and Bradesco, which came next in terms of financial volume, had a turnover of less than R $ 1 billion.
On the last day of the 1st, Vale announced a repurchase program of up to 270 million shares. The sum is equivalent to about 5.3% of the total outstanding shares. The program has a term of 12 months.
In a report, BTG Pactual’s Research team states that investors have long waited for a more aggressive stance from Vale in relation to cash return and the board of directors is clearly listening to the demands of shareholders. In addition, the buyback program should be interpreted as a clear signal to the market that Vale’s shares are grossly devalued, being traded at an EV / EBITDA of 2.5x 2021, and that the company is very confident in the prospects of the free cash flow (FCF) ahead.
“We hope that this move will speed up the company’s ongoing re-rating process and reduce the excessive 40% gap for Australian peers. At current price levels, we believe that there is no better investment alternative for the company than buying its own. actions ”, say BTG professionals.
– Photo: Julio Bittencourt / Valor
Get the latest news delivered to your inbox
Follow us on social media networks