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.
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Brazil on Thursday ditched a trade complaint against Canada over aircraft subsidies and called for wider negotiations between all aircraft producing nations to halt a slide toward aircraft trade wars, sidestepping the World Trade Organization, Reuters reported. The abrupt move by Brazil, home to the world’s third largest planemaker Embraer, comes as larger rivals Airbus and Boeing remain locked in a 16-year-old fight at the WTO that led to tit-for-tat transatlantic tariffs.
Argentina’s state-owned oil producer looks set to avoid a hard default after creditors signed on to swap some of their bonds due next month and the central bank agreed to provide the company with the dollars it needs to pay back the remainder, Bloomberg News reported. YPF SA bondholders will exchange almost 60% of the $413 million note due in March, according to a company statement.
Brazil looks set to break a key fiscal rule to provide another round of financial aid to the poor as lawmakers pile pressure on President Jair Bolsonaro to act fast during a second wave of Covid-19, Bloomberg News reported. Economy Minister Paulo Guedes has tried to protect the so-called spending cap rule by proposing an emergency constitutional amendment that would allow the government to reduce mandatory spending in other areas -- a process that would require lengthy negotiations with congress.
Ecuador bonds fell for a second day as Sunday’s presidential election threatened to throw the Latin American nation back into economic turmoil, Bloomberg News reported. With less than 1% of votes left to count, Ecuador is heading for an April runoff between leftist Andres Arauz, with almost a third of the vote, and the indigenous party’s Yaku Perez, with 20.10%. To investors’ surprise, market friendly Guillermo Lasso is third with 19.49%, according to the National Electoral Council’s latest count.
YPF SA, Argentina’s state-run oil driller and refiner, looks set to avoid a costly default next month after it won support for a debt swap from a large creditor group, Bloomberg News reported. The so-called Ad Hoc Bondholder Group, which holds 45% of YPF’s 2021 notes, expressed support for the exchange after the company increased its cash sweetener over the weekend, according to a statement. Bonds due in 2021 rose 4.5 cents to 95 cents on the dollar as of 10:40 am in New York, the highest since Jan. 8. The company’s shares climbed as much as 6%.
Brazilian miner Vale agreed Thursday to pay $7 billion in compensation to the state of Minas Gerais where the collapse of its dam two years ago killed 270 people, polluted rivers and obliterated the surrounding landscape, the Wall Street Journal reported. The settlement, the biggest in Brazilian legal history, is a watershed moment for a country long hampered by impunity and where miners and big businesses have often exerted more power than the state, especially in rural areas.