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.

Read more…


Brazilians Are Shocked, Shocked at Corruption!

October 21, 2014

Antonio Prata – The New York Times, 10/21/2014

We Brazilians suffer from a curious cognitive dysfunction, which occurs with the same frequency in our population as lactose intolerance does among the Japanese, or the inclination for punning among the English. We have the ability to be outraged by corruption, while engaging in our own petty versions of it.

As the second round of presidential voting approaches on Sunday, this evil is spreading like an epidemic. In bars, on the streets and on social networks, advocates of Dilma Rousseff, the Workers Party candidate for re-election, and Senator Aécio Neves, of the Brazilian Social Democracy Party, never tire of reminding us of the “robberies” that their rivals commit.

Workers Party supporters cite the re-election scandal in which Social Democrats were accused of bribing congressmen to approve a constitutional amendment allowing Fernando Henrique Cardoso to compete again for the presidency in 1998. Social Democrats’ supporters mention the “Mensalão,” a case in which congressmen allied with the Workers Party regularly received money diverted from Luiz Inácio Lula da Silva’s illegal campaign contributions. Those not involved in the party squabbles tend to blame all the politicians, as if the politicians were a separate species, able to corrupt our reputable citizens.

Read more… 


Brazil Fixated as ‘Human Bomb’ Revelations Rock Elections

October 21, 2014

Sabrina Valle and Juan Pablo Spinetto – Bloomberg Businessweek, 10/20/2014

When in April 2012 Paulo Roberto Costa was eased out of his job as the refinery chief for Brazil’s Petroleo Brasileiro SA (PETR4), the state-run oil giant, it was treated as a routine shakeup, with Chief Executive Officer Maria das Gracas Foster praising him as a “dear colleague” who would be “hard to replace.”

Costa, who was also a company director, seemed unruffled. Within months, he had set up a consulting company in Rio de Janeiro’s up-and-coming Barra de Tijuca beach district, with ambitions to raise about $120 million to build a shipyard and marine repair terminal.

This would be a family affair. During a champagne party to celebrate, he showed reporters the tidy office –- holding mementos from his 35 years at the company known as Petrobras –- that he said his wife had decorated and that he planned to share with one of his two daughters who would work alongside him.

Read more… 


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.

Read more…


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.

Read more…


Perennial Nightmare Petrobras Pushes Brazil Stocks Lower

October 17, 2014

Kenneth Rapoza – Forbes, 10/15/2014

Presidential polls are not to blame for this one.  Brazil’s stock market decline is a mix of oil giant Petrobras, and lackluster consumer sales. Though for true followers of the Brazilian stock market, Petrobras is public enemy No. 1.

Brazilian equities were the worst performing of the BRIC markets on Wednesday due to Brazil’s perennial stock market disaster — Petrobras — which fell by 9.06%. The iShares MSCI Brazil (EWZ) exchange traded fund settled 5.11% lower today while the MSCI Emerging Markets settled 1.26% lower.

Petrobras remains a government story, mired in electoral politics and fiscal policies.

Read more…


Petrobras scandal adds fuel to Brazil’s fiery election campaign

October 16, 2014

Joe Leahy – Financial Times, 10/15/2014

Common wisdom has it that Brazilians have become so desensitised to political scandals – so frequent are they on all sides of the political spectrum – that they make little difference in elections.

But there are signs that what could end up being Brazil’s biggest corruption case – the alleged kickbacks from state-owned oil company Petrobras – could be different. Politicians from the Workers’ party-led ruling coalition are accused of skimming 3 per cent off billions of dollars of contracts signed by Petrobras ahead of the election of incumbent president Dilma Rousseff in 2010.

Not only are Brazilians taking more notice of this scandal – one Facebook user complained last week it meant he was paying 3 cents of every dollar to the Workers’ party, or PT, whenever he fills his car with petrol. “Better to ride a bicycle,” he said.

Read more… 

 


Follow

Get every new post delivered to your Inbox.

Join 5,808 other followers

%d bloggers like this: