Fri, May 22, 12:34 PM
- Brazil stocks are sharply lower after Eletrobras (EBR -4.5%), the country’s largest utility by revenue, was cut to junk by Moody’s.
- While EBR showed “some financial improvement” in its Q1 earnings, its credit metrics remain too weak to remain at investment grade, Moody’s said, also citing an investigation on alleged bribes involving the former head of a subsidiary.
- Meanwhile, Pres. Rousseff is trying to salvage her presidency as things go from bad to worse amid the Petrobras (PBR -3.8%) corruption scandal, with a new poll finding that 63% of Brazilians favor impeachment proceedings.
- Brazilian opposition lawmakers are considering impeachment, either as an accessory to the corruption or for crimes of “irresponsibility” with finances.
- Also: PBR.A -3.8%, EBR.B -6.6%, VALE -0.2%, ELP -1.2%, CIG -3.3%, CPL -2%, SBS -4.7%, BSBR -2.7%, BBD -2.6%, ITUB -2.3%.
- ETFs: EWZ, BRF, BRZU, EWZS, BRXX, BRAQ, BZQ, BRAZ, BRAF, UBR, DBBR, FBZ
Wed, May 13, 12:45 PM
Wed, Apr. 1, 2:25 PM
- Petrobras (PBR +7%) and other Brazilian stocks post strong gains in reaction to Pres. Rousseff's declaration that her government will do whatever it takes for the country to meet its fiscal target this year.
- Rousseff says PBR may release its audited results by the end of the month, and issues a strong denial that she knew about the bribery that has shaken the company she chaired during 2003-10.
- Also: PBR.A +6.5%, EBR +6.6% EBR.B +9%, ELP +6%, CIG +4.9%, CPL +3%, SBS +4.9%, BSBR +5%, BBD +4.5%, ITUB +3.9%; however, with continued negative headlines on iron ore prices, VALE -1.9%.
- ETFs: EWZ, BRF, BRXX, EWZS, BRZU, BRAQ, BZQ, BRAZ, BRAF, UBR, DBBR, FBZ
Tue, Jan. 20, 5:49 PM
- Monday’s massive blackout is raising concerns that electricity rationing may hit Brazil this year, dealing a major blow to the country’s already fragile economy.
- Critics say the government's unwillingness to take politically unpopular actions, such as raising water rates and enforcing strict conservation, has made a bad situation worse.
- The blackouts also caused some economists to revisit their forecasts; the chief economist at Banco Votorantim in São Paulo projects Brazil’s economy to grow just 0.1% this year, with even that figure too optimistic if electricity rationing occurs.
- Relevant tickers: EWZ, CIG, CPL, EBR, ELP, BRZU, BZQ, UBR, DBBR, FBZ
Dec. 12, 2014, 8:19 AM
- Eletrobras (NYSE:EBR) says its board approved a plan to renegotiate 8.5B reais ($3.2B) in debt owed to Petrobras (NYSE:PBR), as part of a plan by Brazil's government to help the state-run oil company borrow money in capital markets.
- Under the terms of the plan, Brazil's Treasury will guarantee 4.3B reais of the amount, while the remaining 4.2B reais will come from a government development fund financed with taxes that consumers pay on their electricity bills.
- Separately, Brazilian prosecutors yesterday filed charges against 36 suspects in the corruption investigation alleging construction companies bribed public officials and overbilled Petrobras for contracts.
Dec. 11, 2014, 9:42 AM
- Brazil's government is working on a plan to help Petrobras (PBR -4.7%) borrow money in capital markets to help finance exploration and operational activities during next year, the mining and energy minister says.
- The plan would involve the Brazilian government guaranteeing a debt issuance by PBR backed by 9B reais ($3.4B) in debt that state-controlled power utility Eletrobras (NYSE:EBR) owes the oil company, according to the minister.
- Bankers say PBR risks being temporarily left out of capital markets as the widening corruption probe makes it harder for the company to raise cash in debt and equity markets.
Oct. 27, 2014, 12:49 PM
Oct. 27, 2014, 10:31 AM
- It's an ugly open for Petrobras (PBR -14.2%) following Pres. Rousseff's re-election as Brazil's president, as hopes are dashed for a regime change that might have helped investor confidence in the country and the company.
- Rousseff's victory "was not totally priced in yet," Loomis Sayles analyst Bianca Taylor says, adding that she expects a slump in Brazil assets as a whole in the next few days.
- PBR and state-controlled utility Centrais Eletricas Brasileiras (EBR -12.3%) were the two worst performing stocks in the 834-member MSCI Emerging Markets Index this morning.
- Also: VALE -5.9%, ITUB -6.5%, BBD -8.1%, GOL -7.6%.
- Brazil ETFs: EWZ -6.7%, BRF, BRXX, EWZS, BRZU, BRAQ, BZQ, BRAZ, BRAF, UBR, BRZS, DBBR, FBZ
Oct. 27, 2014, 9:13 AM| 1 Comment
Oct. 21, 2014, 9:14 AM
Jul. 29, 2014, 11:19 AM
- Brazil’s equity market has soared since mid-March, when the buzz first began that Pres. Rousseff might lose in the October elections; the iShares MSCI Brazil Capped ETF (NYSEARCA:EWZ) has jumped ~30% since then and has gained 16% YTD.
- Part of the rally is propelled by optimism that the state-owned sector, including Petrobras (NYSE:PBR) and Electrobras (NYSE:EBR) will operate better with a new, more pro-business government; iron ore producer Vale (NYSE:VALE), whose fate is tied to China, is the only high-profile underperformer, not even breaking even this year.
- But strategist Geoff Dennis is skeptical of the Brazilian rally, and thinks it's time to sell; the new government is not likely to have a big mandate, the election is too close to call at present, and Brazil is no longer cheap, trading at 11.2x forward earnings a 33% premium to its recent average of 8.5x.
Jun. 6, 2014, 3:59 PM
- Petrobras (PBR +7.6%) leads Brazilian stocks higher as support for Pres. Rousseff continues to shrink according to a new opinion poll.
- Brazil's real rose for a third straight day in the longest stretch of increases in almost a month, as speculation grows that Rousseff will face a runoff after the October election.
- Other big Brazilian gainers: EDN +7.6%, EBR +6.6%, BBD +4.9%, ITUB +4.2%, CIG +3.6%, VALE +2.7%, BSBR +2%, ELP +1.4%.
Apr. 10, 2014, 5:58 PM
- Top Brazilian power company Eletrobras (EBR) won't run out of money this year or next but may need more capital further down the line, CEO Jose Costa tells WSJ.
- Prices for the power EBR sells dropped dramatically in 2012 when it renewed its concession contracts for another 30 years; as a result, EBR reported a loss of 6.3B Brazilian reais last year, raising doubts about its ability to carry out its plan to spend ~60B reais over the next four years without fresh capital.
- Power rationing won't be needed, Costa says, but price increases need to take effect immediately so they have an impact on consumption.
Apr. 9, 2014, 12:45 PM
Mar. 27, 2014, 2:39 PM
- What S&P downgrade? Brazil equities so far have shrugged it off and are extending gains today, apparently driven by a new poll that shows Pres. Rousseff‘s approval rating fell for the first time since street protests last year and raising the prospect of a change in government later this year.
- "There is so much uncertainty in the region with a lot of election or political clout that the market is not discriminating between good and bad companies," says a portfolio manager for the JPMorgan Latin America Fund.
- PBR +8.1%, EBR +6.7%, SID +6.2%, GGB +4.1%, BDORY +8.3%.
- ETFs: EWZ, BRF, BRXX, EWZS, BRAQ, BRAZ, BZQ, BRZU, BRAF, UBR, BRZS, DBBR, FBZ
Feb. 18, 2014, 9:13 AM
EBR vs. ETF Alternatives
Centrais Eletricas Brasileiras SA, along with its subsidiaries, is engaged in generation, transmission and distribution of electricity in Brazil. It operates in three segments namely generation, transmission and distribution segment.
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