The election of candidate Luiz Inácio Lula da Silva (PT) as president of the republic this Sunday, 30, should move the markets on Monday, 31, and press mainly state-owned companies such as Petrobras (BVMF:PETR4) and Banco do Brasil (BVMF:BBAS3).
With the results after close elections, Felipe Izac, partner at Nexgen Capital, expects the markets to show volatility in the short term, with quotes of state-owned companies down, especially Petrobras. However, Izac reinforces that this result was already priced in. “Mainly in this last week, the stock market fell a lot, especially the state-owned companies, and the dollar rose a lot. In a first moment, it is possible that the stock market will fall and the dollar will rise, according to Izac. “But then we should see the market stabilizing and becoming positive again. Today Brazil is very well placed economically, especially in comparison with the main emerging countries. The country is very well regarded, especially by foreign investors. According to Izac, after this first moment, the expectation is for the dollar to fall and the Ibovespa to rise. In case the current president Jair Bolsonaro (PL) contests the results of the polls, this can bring high political instability, changing this positive view abroad. The second point of attention pointed out by Izac is the announcement of Lula’s economy minister.
Flávio Conde, analyst at Levante, agrees that tomorrow the markets should open on the defensive. He projects an increase in the dollar from R$ 5.30 to R$ 5.45 to R$ 5.50, future interests (Di futuro) increasing around 0.50% to 1.00% per year in most of the maturities and state-owned companies, such as Petrobras and Banco do Brasil, with falls of 10%. According to Conde, this is because Lula said in the campaign that “he would make fuel prices more transparent” and Banco do Brasil would no longer act as a private bank, but more with a social focus, charging interest rates below those of private banks. “However, if Lula announces Meirelles as economy minister, the declines may soften,” he ponders.
According to Levante’s analyst, shares of educational companies such as Yduqs (BVMF:YDUQ3) and Cogna (BVMF:COGN3) should rise well, because Lula has already said he would again boost initiatives such as the Student Financing Fund (Fies) and University For All Program (Prouni).
“In fact, I believe that Haddad could be the Minister of Education as a consolation prize, and construction companies focused on low income, such as MRV (BVMF:MRVE3), Direcional (BVMF:DIRR3) and Tenda (BVMF:TEND3), could rise well because of Lula’s recent statement that he will boost the government’s housing program, which would be called Minha Casa Minha Vida again (today it is called Casa Verde Amarela) with more resources and lower interest rates. Conde adds that shares of retailers such as Magalu, Via, Americanas, Lojas Renner (BVMF:LREN3), shopping malls and even Méliuz (BVMF:CASH3) should rise well tomorrow as well.