Petrobras collapses on the stock market after the change of CEO, now appointed by Lula

Left-leaning Brazilian President Luiz Inacio Lula da Silva took office on Monday and markets reacted with an immediate crash, sending shares of state-owned Petrobras further plummeting just days after a chief executive announced plans that sparked a stock market run. exit by investors.

Lula on Monday promised high-level social spending, including extending the fuel tax holiday: both measures, according to Reuters , will cost the Brazilian Treasury about $9.9 billion a year in lost revenue.

Brazilian markets reacted with a 3.24% drop in the São Paulo stock market index, according to Reuters, and a 6% loss for Petrobras. The real currency saw its value fall by 1.5%. These are the latest figures on the company's value

Last week, Lula chose his political ally, Jean Paul Prates, as the new head of Petrobras. Prates accused the current leadership of the state oil company of bringing Petrobras "off a cliff" by focusing solely on oil and gas and paying little attention to the energy transition, as reported by Bloomberg.

Under Prates, Petrobras' new goal is to become a renewable energy giant, an idea investors have not liked, given the performance of alternative energy companies over the past year.

Lula's inaugural speech has sparked investors' fears that the new path is strongly interventionist, as indicated by the new president himself. In his first address to the nation, Lula promised more government intervention to promote economic development. In particular, he said both Petrobras and BNDES, the national development bank, should lead the country's growth.

With his return to the presidency, Lula replaces populist far-right President Jair Bolsonaro, whose administration has been the subject of controversy. Lula's own government was scuttled by massive corruption at Petrobras, which led to the impeachment of his designated successor in 2016. Lula's return has investors fearing not only interventionist policies, but also a repeat of the endemic corruption that has crippled Petrobras.

The article Petrobras collapses on the stock market after the change of CEO, now appointed by Lula comes from Scenari Economici .

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/petrobras-cade-in-borsa/ on Tue, 03 Jan 2023 07:00:32 +0000.