Brazil Stocks Sink As Jim Chanos Slams Petrobras

October 22, 2014

Kenneth Rapoza – Forbes, 10/21/2014

Sometimes all it takes is a celebrity investor to say something bad about a market and the investor riff-raff go running for the door. On Monday, famed investor and regular CNBC guest Jim Chanos said Brazilian state owned oil company was not an investment, but an investment scheme. He was referring to what most Petrobras watchers already know — that the company is used by the government as a revenue stream, and as a means to control inflation as it keeps a lock on gasoline prices.

Chanos said this on a day when Petrobras shares had down their usual mega-drop, falling 6% in a day. Less than 12 hours later, the stock opened 6% lower on Tuesday following Chanos’ guidance. He’s laughing all the way to the bank this week.

And while every broker and trader on the Bovespa floor in São Paulo needs something to tell newswire reporters about the wild drop in Brazilian equities today, it is very unlikely that the recent poll by Datafolha showing incumbent Dilma Rousseff neck and neck with challenger Aécio Neves is any reason for investors to sell Brazil. Business Insider gets it. Linette Lopez wrote in a headline today that Chanos Tanked Brazil.

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Economic Affairs Dominate Brazil’s Latest Presidential Debate

October 20, 2014

TeleSUR, 10/20/2014

Candidates Dilma Rousseff and Aecio Neves held their third televised presidential debate late on Sunday, a week before the second round run off election. Both candidates avoided personal attacks and addressed key issues on the economy.

​One week before Brazil’s presidential election run-off, current President and candidate Dilma Rousseff held a televised debate with her rival right-wing candidate Aecio Neves, late on Sunday. Both candidates centred the discussion on inflation, unemployment, and the economy in general.

Rousseff attacked Neves for his plans to appoint, a former president of the Central Bank, Arminio Fraga, as Finance Minister. Fraga headed the Central Bank the last time Neve’s Social Democratic Party was last in power, headed by Fernando Cardoso. Dilma reminded Neves that Fraga had been partly responsible for the high inflation levels during that government.

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Brazil’s Rousseff Admits There Was Wrongdoing at Petrobras

October 20, 2014

Paulo Trevisani – The Wall Street Journal, 10/19/2014

Brazil’s President Dilma Rousseff said Saturday that there was embezzlement at government-controlled oil producer Petróleo Brasileiro SA .

The company, known as Petrobras, has been at the center of a corruption scandal allegedly involving people connected to Mr. Rousseff’s Workers Party, or PT.

“I will do all I can to reimburse the country,” Ms. Rousseff said during a news conference at the presidential residence late in the afternoon. “There was” deviation of public money, she said according to a transcript of the interview published on her official campaign website.

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Brazil’s markets track election polls

October 20, 2014

Joseph Leahy – Financial Times, 10/20/2014

When Frederico Perin looks at the Brazilian stock market these days, he is not studying company fundamentals or even the trading charts very much. For the founder of language website Idioma Fácil and thousands of other day traders and retail investors like him, the perceived fortunes of the candidates in Brazil’s 2014 presidential election next Sunday are more important for the markets.

Every surge in the polls by Dilma Rousseff, the incumbent president, who is unpopular with investors for her perceived economic interventionism, weakens stocks and the currency. Every gain for Aécio Neves, the pro-business opposition candidate, has the inverse effect.

Ms Rousseff won the first round of the election with 42 per cent compared with 34 per cent for Mr Neves but they are now neck-and-neck in the polls.

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Scandal Over Brazilian Oil Company Adds Turmoil to the Presidential Race

October 20, 2014

Simon Romero – The New York Times, 10/19/2014

Paulo Roberto Costa was living an oilman’s dream.

He had a house in a luxurious gated community here. He bought a yacht and drove an armored Range Rover. He had more than $25 million stashed in bank accounts in Switzerland and the Cayman Islands.

But that dream evaporated recently when the police arrested Mr. Costa and charged him with orchestrating a bribery scheme on an epic scale at Petrobras, Brazil’s national oil company, and funneling the proceeds to the governing Workers Party and its allies while enriching himself.

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Brazil looks to buy Chinook helicopters from Boeing as tensions with U.S. thaw

October 17, 2014

Andrew O’Reilly – Fox News Latino, 10/17/2014

In a sign that the icy relations between Brazil and the United States in the wake of the National Security Agency spying scandal are beginning to thaw, the South American nation has expressed an interest in buying a handful of military helicopters from Boeing, the Chicago-based company said.

The Brazilian Army is looking to purchase several CH-47 Chinook helicopters from Boeing in a deal that would add to an already growing list of potential weapons deals between the U.S. and Brazil. Boeing executives said that they were “pretty positive” about the deal and that the company views Brazil as an important partner for both commercial and defense projects.

“We have had some early discussions about the Chinook with the Brazilian Army,” Boeing spokesman Scott Day told Reuters, adding that the proposed deal was not a very big one. “We still view Brazil as a very important country for Boeing.”

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Petrobras blamed for stalling Brazilian airline growth

October 15, 2014

Samantha Pearson – The Financial Times, 10/13/2014

Petrobras’s fuel pricing policy threatens to put the brakes on Brazil’s airline industry, the world’s third-biggest domestic market and a key propeller of the country’s growth, industry associations have warned. Brazil now has the second most expensive airline fuel in the world after Malawi in Africa, making it impossible for airlines to reduce ticket prices further as the economy slows, said Eduardo Sanovicz, head of the Brazilian Airlines Association ABEAR.

“This is a fundamental barrier if Brazilian aviation is to increase its number of passengers from the current 111m,” said Mr Sanovicz, adding that fuel represents 40 per cent of Brazilian airlines’ operating costs compared with a global average of just over 30 per cent.

While taxes and currency fluctuations are partly to blame, jet fuel is so expensive in Brazil largely because the state-controlled oil company Petrobras still charged a heavy “import fee” even though more than 75 per cent of the fuel nowadays was refined in Brazil, Mr Sanovicz added.

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