Petrobras Shares Slump as Brazil's Bolsonaro Doubles Down on Intervention

Petrobras shares plunged 21% on Monday, wiping out 70 billion reais ($12.7 billion) in market value, as Brazilian President Jair Bolsonaro again slammed its pricing policies after he replaced the state-controlled oil company’s market-friendly CEO with a retired army general, Reuters reported. The selloff, following a series of analyst downgrades, deepened after Bolsonaro said the company’s fuel policy was only pleasing to financial markets and select groups in Brazil and should be changed as part of an effort to lower gasoline and diesel prices. Overall, the last few days have marked a dramatic about-face for Bolsonaro, a right-wing populist whose interventionist instincts until now had been largely contained by economically conservative allies. Shares in state electricity company Eletrobras also plunged on Monday after Bolsonaro said it would be the next sector in which the government would “stick its finger.” In comments to Brazil’s Radio Bandeirantes on Monday, Joaquim Silva e Luna, the man tapped by Bolsonaro on Friday to take the reins from Roberto Castello Branco, floated the idea of a government fund, or “cushion”, to lessen the effects of fluctuating fuel prices on consumers. Read more.

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