The Bovespa index has been trading down lately on concern that government intervention will worsen earnings of state-controlled companies including Petrobras.
What bothers investors is the perception that the government is putting its goals ahead of the companies. Petrobras has been being forced to sacrifice revenue so that the pressure on inflation eases. And by the way, it has been delaying (or defaulting?) on payments to its suppliers in order to keep a healthy cash flow and not squeeze further its bottom line.
Colombia’s state-controlled oil and gas giant Ecopetrol has been eclipsing Brazil’s Petrobras on the New York Stock Exchange. Ecopetrol’s market capitalization increased to $129.95 billion on the NYSE, overtaking Petrobras, currently valued at $121.87 billion.
The 25% increase in value of Ecopetrol pushed the company past Petrobras after the state-governed Brazilian energy company lost nearly 40% of its value over the same period.
Brazil President Dilma Rousseff’s caps on oil prices and nationalist policy stance toward Petrobras have interrupted its expected ascent after high potential finds in deep waters off the coast of Brazil in 2007.
Having said that, giant bank Itau (one of Petrobras analysts) sums it all by recommending clients to short Petrobras shares… see below (thanks to Mansueto Almeida).