Hello people from all world and Leo Finance.
Today I want to talk to you about how politics here in Brazil influences share prices.
To begin with, I say that we have 2 governments. The one on the left, which is said to be more focused on the social area and less on the financial area, and the one on the right, which is said to be more capitalist, more linked to the development of companies with a lesser focus on the social area.
These 2 governments keep alternating here in Brazil.
So, who was elected in the last elections was President Lula, who will have his mandate starting in January 2023.
He is traditionally a left wing politician. Unfortunately, the big focus is the social area. For this, he spends a lot of money and the look on the economy of Brazil is smaller, causing higher inflation, higher interest rates and companies to grow less.
To make matters worse, he chose Fernando Hadad as minister of the economy, who is a left-wing politician. He doesn't understand much about economics. And today, he says he intends to put Aloízio Mercadante, who was his campaign manager, as president of Petrobras, which is the biggest company we have here. It's from the oil sector.
As a result, the stock market, which had already been falling since Lula was elected, is now down around 2.5%. Stocks in state-owned and retail companies were the hardest hit.
Petrobras' common shares (petr3), which are the same as the company's controlling shares, opened at R$28.08. With the announcement of Aloízio Mercadante, they dropped to a minimum value of R$ 26.61. They have already recovered a little and are now "only" down 3.35%, quoted at R$27.12.
This is just one example of a company that went down today. More than 90% of the companies had their quotation falling today because of this news from the minister.
I would be happy if it was just a price variation due to the news, but, during these next 4 years I predict that we will go through turbulent years in the economy and Brazil will grow less and companies will profit less, mainly state-owned ones, than the PT( which is President Lula's party), usually intervenes in these state-owned companies and makes them work more for the social and stop aiming at profit, or put corrupt or incompetent people to manage them and they have their results harmed.
That's it folks, that's our reality here in Brazil. How is yours where you live???
Thank you and good afternoon everyone!!!
source of picture: https://www.bankrate.com/investing/how-to-trade-stocks/