Despite a year of price hikes, Brazil’s Petrobras shares appreciate 27%

RIO DE JANEIRO, BRAZIL – A survey conducted by Economatica platform showed that from January 2021 through January 2022, Petrobras shares increased in value by 27.45%.

Despite 2021 having been marked by consecutive readjustments in fuel prices and the change of the state-owned company’s president in April, Veedha Investimentos head of equities Rodrigo Moliterno explains that some of the company’s features and the current scenario prevent the shares from being negatively impacted.

According to Moliterno, “the risk of government influence within the company is decreasing. We observed several political forces trying to interfere in the prices charged, but without success. Petrobras remained austere in its policy and this reduced market risk,” he said.

The economist pointed out that the commodity itself with which the company operates, oil, “is on a recovery trend. Demand and performance have increased because of the reopening of economies,” he said.

In addition, results and forecasts for the state-owned company show the market’s positive reaction. The annual production record in the pre-salt in 2021, the auctions the company held, and the expectation for the payment of dividends in 2022 are some examples.

INVESTOR BEHAVIOR

Despite the company’s appreciation and perspectives, investors should be particularly attentive to two factors that could have a negative impact on the shares.

Valor Investimentos specialist Virgílio Lage said that “the risk of using Petrobras and other state-owned companies to carry out populist reforms is something that must be carefully monitored, for example.”

The second point Lage mentioned is the volatility likely to occur because of the elections. “Investors who seek short-term results need to pay more attention to the electoral period.”

“On the other hand, those who invest in the long term are less concerned and can hold on to their shares. The company is breaking dividend records, is leaner, and has divested in less important areas,” he said.

Along the same lines, Moliterno also said that the state-owned company has been behaving more like “a private company and geared towards the market, regaining its credibility. It is once again a cash-generating company and this attracts investments.”