Petrobras shares fall 10% due to fear of political interference in state-owned companies

Petrobras' shares plummeted this Wednesday (14) on the São Paulo Stock Exchange, after the advancement in Congress of a law that facilitates political appointments for the command of state-owned companies. Petrobras' common shares (PETR3) fell 9,8% at the close of B3.

Posted by

João Caminoto

December 15, 2022, 04:28 PM

The market's reaction is a response to the approval on Tuesday night in the Chamber of Deputies of changes to the State Law, created in 2016 to shield public companies from political interference.

Among several points, the project reduces from 36 months to 30 days the waiting period for party leaders or those who have participated in electoral campaigns to be appointed to head state-owned companies.

The changes are seen as a nod to the elected president, Luiz Inácio Lula da Silva, who appointed as future president of the National Bank for Economic and Social Development (BNDES) Aloizio Mercadante, a historic member of the Workers' Party (PT) and member of the transition.

Flash vote

The project was approved in a “lightning, sneaky, opportunistic and contrary to public interest” vote, criticized the Instituto Não Aceito Corrupção (Inac).

The project will still be debated and voted on in the Senate, with no deadline set.

The market reacts nervously to Lula's imminent inauguration due to fears of an unbridled increase in public spending and a rejection of privatizations.

The fear of Petrobrás' investors and minority shareholders is that the new directors appointed by Lula will place the interests of the federal government ahead of those of the company. One example is the fuel price policy to be adopted by Petrobrás under the new management.

The PT leader will assume the Presidency of Brazil on January 1st for a third term.

(with AFP)

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This post was last modified on December 15, 2022 04:47 pm

João Caminoto

Journalist with more than 30 years of experience, I held various positions - from reporter to international correspondent to editorial director - in several publications, such as Estadão, Broadcast, Época, BBC, Veja and Folha. I feel privileged to have embraced this profession. I am in love with my family and Corinthians.