Brazilian market shook as Bolsonaro dismissed Petrobras chief

Brazilian oil producer Petrobras’ shares plunged and the country’s currency fell against the dollar after President Jair Bolsonaro moved to replace CEO after a dispute over fuel prices.

Petrobras’ São Paulo-listed stock fell 20% in trading Monday morning as investors responded to a government announcement last week. Nominate an Army General With no experience in the oil and gas industry, he has become the new CEO of the state-owned group.

The aftermath spread to a wider market, with the benchmark Bovespa index falling by more than 5%. The Brazilian real lost 2.4% of its value and changed hands at $ 5.51. This is the lowest since November.

Sudden decision Petrobras Bolsonaro came after incumbent CEO Roberto Castello Branco publicly criticized the recent rise in gasoline and diesel prices that caused anxiety and strike threats among truck drivers.

Despite the claim that right-wing populist leaders do not “interfere” with the company, escalation intends the government to take a more interventionist approach to the economy ahead of next year’s presidential election. Raised concerns among international investors.

Also raised questions about the future of Paul gedesBrazil’s Finance Minister, who has long condemned the government’s intervention in business and the government’s commitment to economic reform.

The fear of further government invasion into the business was excited over the weekend as Bolsonaro hinted that a similar move might be underway.

“If the media is worried about yesterday’s switch [in CEO]There will be more next week, “he said. “We put our fingers on electricity, which is also a problem.”

Shares in Eletrobras, Latin America’s largest utility, fell almost 7%. The government recently said that utilities are on the list of state-owned enterprises intended to be privatized.

Valor Investmentimentos analyst Pedro Lang said the market is “open in despair.”

“This anxiety, fear of what will happen and what will happen next, we are afraid,” he added. “Today will be a long day.”

The Petrobras Board of Directors will meet this week to discuss a proposal to appoint Joaquin Silva Erna, a reserve general who served as Defense Minister under former President Michel Temer, as the new chief of oil producers. He is currently leading the hydroelectric generator Itype Vinacional.

The Brazilian state holds about 36.8% of Petrobras, but 50.5% of voting rights.

Additional report by Carolina Phyllis

Brazilian market shook as Bolsonaro dismissed Petrobras chief

Source link Brazilian market shook as Bolsonaro dismissed Petrobras chief

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