Bovespa (B3) closed higher in Brazil after the privatization of BR Distribuidora (BRDT3) and the announcement of FGTS money release

The main index of the São Paulo Stock Exchange (B3), the Ibovespa, closed up today, at 104,119 points, after rising 0.4%. The main reason was the privatization of BR Distribuidora. 

The main index of the São Paulo Stock Exchange (B3), the Ibovespa, closed up today, at 104,119 points, after rising 0.4%. The main reason was the privatization of BR Distribuidora. 

BR Distribuidora was up 5% on the stock market after the sale of shares made by Petrobras.

The market also considered positive the policy for the Government Severance Indemnity Fund (FGTS) and PIS-Pasep Fund quotas announced by the government. Workers can now withdraw up to R$ 500 from each active or inactive FGTS account (from current or previous employment).

BM&F Bovespa (B3), the São Paulo Stock Exchange, exceeds the number of one million individual investors

BM&F Bovespa, the São Paulo Stock Exchange reached, in May 2019, the number of 1.09 million individual investors. The mode of investment maintained in May the pace of entry of new investors in the wake of the low-interest rate (Selic) environment in Brazil. Thus, the growth in relation to the number of active individuals investors at the end of 2018 was about 35% so far. Continuing the trend thus, the mark of 1.5 million individuals should be reached by the end of 2019.

Despite the growth, the number represents 1.3% of the Brazilian population. To give you an idea, Brazil is very far from the US, for example, where 54% of people invest in the stock market. The growth was announced on June 10 by the São Paulo stock exchange operator.

B3 also reported that the Brazilian domestic stock market turnover in May 2019 reached 15 billion reais, an increase of 5.8% compared to the same month last year. This gave B3 26% higher contract revenue.

Bovespa B3 opens higher today after the Ibovespa closed down yesterday

The main indicator of the São Paulo Stock Exchange, B3, opened higher today (06.Jun.2019), after having retreated more than 1% the day before. The recovery occurs because of the relatively benign scenario abroad.

Yesterday, Ibovespa had shown a fall due to new disagreements between the National Congress and the government of Jair Bolsonaro. The approval of the supplementary credit, aimed at allowing the government to continue to spend above the spending ceiling, was postponed again. This left the Brazilian financial market nervous and the reaction was a downturn on the Stock Exchange (Bovespa). Yesterday, the Ibovespa had a 1.75% drop, the highest since May 16, 2019.

Another factor that displeased the Brazilian financial market was the announcement of possible distancing of the current government from liberal policies. Yesterday, according to Bloomberg, the government of Jair Bolsonaro assumed that it could demand further flexibilization of the limit of public expenses after the ordeal of the Pension Reform. That would throw down the commitment of the minister Paulo Guedes's team to fiscal balance.

The financial market in Brazil continues to believe in the economic team of the current government, even with the continuous negative results of the economy in 2019

Speaking at the Finance and Taxation Commission of the Chamber of Deputies, Brazil's economy minister, Paulo Guedes, defended the pension reform as the only way to reposition the country on the path of growth. The speech was viewed positively by the Brazilian financial market. Guedes said that it is necessary to disinfect the public machine and "slow down hiring" of more public servants.

The minister's speech was well received by the financial market, so much so that at the end of yesterday (04.jun.2019) the Stock Exchange (Bovespa) closed close to the high of the day. Therefore, Brazilian financial actors continue betting on the economic team of the current government, even after the continuous negative numbers of the economy.

As I have already written here, "the truth is that the Brazilian Financial Markets (analysts and economists) and the Brazilian businessmen bet very high on a government that was not able to respond to the height to that bet".

Many analysts and economists continue to make the same error of analysis and do not see or do not want to see the undeniable distance between the speech and the actual capacity of the current government to deliver reforms and public policies capable of taking Brazil out of the crisis.

Guedes again confuses some things. The creation of a digital government, where some services are being offered via the internet, does not necessarily mean hiring fewer public servants. When compared to other OECD countries, the level of public servants in Brazil is much lower than in most other countries. The country lacks, for example, the necessary number of doctors, teachers, and police to meet the basic needs of the country.

The dollar value continues to grow in Brazil and end the day at R$ 4.0360

The trading session of the São Paulo Stock Exchange (Bovespa) closed with the dollar rising 0.47%, quoted at R$ 4.0360. In the previous trading session, on May 24, the currency was quoted at R$ 4.0170.

The support of thousands of protesters in various Brazilian cities in favor of Pension Reform and Jair Bolsonaro's government helped to optimize the Brazilian financial market. However, the demonstrations that took place on Sunday, May 26, were smaller than the demonstrations against the cuts made by the current government in the area of education, which occurred on May 15.

Among protesters who took to the streets to defend the government, there were criticisms against the Congress, the political establishment, and specially directed to the president of the Brazilian Chamber of Deputies, Rodrigo Maia (DEM-RJ).

The US political risk consultancy Eurasia evaluates that the actions in defense of Jair Bolsonaro can be positive for the advance of the Pension Reform.

Many analysts believe that this sequence of major anti-government and pro-government demonstrations points to a major political division in the country, which could become more acute if demonstrations continue to grow. The next demonstration against the government is scheduled for May 30.

The B3, the main indicator of the Bovespa, falls after Brazilian Economy Minister Paulo Guedes threatens to resign

Today, May 24, 2019, the Bovespa Index had its third consecutive day of low. B3's main share index rose more than 1% in the morning, but lost its force in the afternoon and closed 0.30% lower at 93,627.80 points.

This fall occurred after VEJA magazine published an exclusive interview in which the Economy Minister, Paulo Guedes, said he would resign if reform proposal becomes just a "little Pension Reform".

In the week, however, the Brazilian stock market was up 4.04%.

The dollar, on the other hand, closed today at R$ 4.0152, the lowest price in 10 days. The Brazilian Real was the emerging currency that strengthened the most on Friday in relation to the US currency.

The financial market in Brazil falls due to the inability of the Bolsonaro government to calm the country

The Brazilian stock market operated today below 90,000 points, the lowest level since January 3, 2019. In a few months, President Jair Bolsonaro burned much of the support he received from the financial market.

The economic deterioration in the Brazilian scenario, the commercial war between the US and China, the Brazilian government's inability to carry out reforms and the huge demonstrations that took place yesterday in several Brazilian cities showed the fragility of the current government of Jair Bolsonaro.

For that reason, in the coming weeks in Brazil, the country's economic scenario should be marked by volatility in the financial market. There is nothing that can reassure the Brazilian financial market in the short term.

To many analysts, the president Jair Bolsonaro has moved beyond any limits after he called thousands of people who took to the streets to speak out against cuts in the education of idiots and imbeciles.

To make matters worse, Flávio Bolsonaro, who is senator and son of the current president seems to be involved in a corruption scandal. Yesterday, a report from the Rio Public Prosecutor's Office (MPRJ) pointed out that there are indications that Flávio Bolsonaro bought and sold real estate to launder money.