Brazil: Ibovespa falls 3% and Petrobras drops more than 6% after Lula da Silva’s first measures

In the first trading session of 2023, the Ibovespa opened with a drop, falling by around 3% during Monday, the 2nd, as a reaction from the financial market to the inauguration speech of Luiz Inácio Lula da Silva (PT) and the first measures of the new government. 

At 1:16 pm, the index was down 2.72% at 106,745.53. In the morning, the drop reached 3.26%. 

Petrobras was one of the main companies affected after the new management removed the state-owned company from the privatization process. At 1:16 pm, the oil company’s shares were down 5.51%, costing R$23.71. During the day, the shares fell as much as 6.7%. 

Banco do Brasil also dropped 4.0% on the stock exchange, costing R$33.33. 

The financial market’s response comes after President Luiz Inácio Lula da Silva’s (PT) decision to revoke decrees signed during the previous administration. The decision was published in an extra edition of the Official Gazette (DOU). 

Among the revoked measures are processes for the privatization of eight Brazilian state-owned companies, including Correios and Petrobras; the decree that allowed mining in indigenous and environmental protection areas; which extinguished and established guidelines, rules and limitations for collegiate bodies of the federal public administration, among others. 

In addition to Petrobras and Correios, six other state-owned companies were removed from the privatization plan, namely: Empresa Brasileira de Administração de Petróleo e Gás Natural S.A. – Pré-Sal Petróleo S.A (PPSA); Brazil Communication Company (EBC); Social Security Technology and Information Company (Dataprev); Nuclebrás Equipamentos Pesados S.A. (Nuclep); Federal Data Processing Service (Serpro); and Warehouses and properties owned by the National Supply Company (Conab). 

In a DOU publication this Monday, the 2nd, Lula also revoked decrees that facilitated access to weapons, suspending the registration of new weapons for Hunters, Shooters and Collectors (CACs), restricting the amount of acquisitions of weapons and ammunition for permitted use and prohibiting the opening of new shooting clubs.

With information from Jovem Pan

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