Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Bolsa de valores de Sao Paulo  >  BM&F Bovespa SA    BVMF3   BRBVMFACNOR3

News SummaryMost relevantAll newsSector newsTweets 

BM&F Bovespa : Brazil markets plunge as Temer scandal threatens reforms

share with twitter share with LinkedIn share with facebook
share via e-mail
05/19/2017 | 05:23pm CEST
A trader works at Mirae Securities in Sao Paulo

Brazilian markets plummeted on Thursday as allegations that President Michel Temer condoned bribes to silence a key witness deflated investor optimism about the prospects for his ambitious pension and labour reform agenda.

Brazil's benchmark Bovespa stock index closed 8.8 percent lower, its biggest daily decline since the 2008 financial crisis. Trading had been halted for an hour after a 10 percent drop triggered a circuit-breaker mechanism.

Blue-chip stocks such as lender Itaú Unibanco Holding SA and state-controlled oil company Petróleo Brasileiro SA dragged the index lower.

The declines slashed 26 billion reais (5.94 billion pounds) off the market values of Itaú and Petrobras.

The Sao Paulo stock exchange saw 3.1 million transactions, breaking a previous record set in October 2014, the day former President Dilma Rousseff won a narrow runoff election, according to exchange operator B3 Bolsa Balcão Brasil SA.

Temer was caught on tape encouraging a prominent executive to pay a monthly fee to keep jailed former House Speaker Eduardo Cunha silent in the country's biggest-ever graft probe, sources said on Wednesday, confirming a report in newspaper O Globo.

"Brazilian stocks and assets and their currency have rallied very strongly up until really today. It's a big pullback and ... it at least brings the risk up to the surface again," Alliance Bernstein Managing Director of Equity Product Management Eric Sprow said.

The report threatened to torpedo a two-year rally in Brazilian assets as traders quickly reassessed the chances of success for efforts to streamline the country's social security system and reform labour regulations. As a result, policymakers' attempts to curtail the growth of public debt and foster economic growth may also be in doubt.

Strategists at JPMorgan Securities and UBS Securities downgraded their recommendations on Brazilian equities to "neutral," citing increased risks to the implementation of structural reforms.

Trader Thiago Castellan at São Paulo-based Renascença brokerage said: "For the market, it's not a question of whether Temer will be ousted or not. The question is whether it will be quick and for how long reforms will be delayed."

Temer denied the allegations on Thursday, saying he will not resign. His remarks disappointed traders who had hoped for a swift resolution to the political crisis, putting renewed pressure on Brazilian stocks and currencies going into the close.


The Brazilian real slumped 8 percent to 3.38 reais per U.S. dollar, the biggest percentage drop since the currency was devalued in 1999, wiping out its gains in 2017, while bond prices tumbled.

Strategists at Credit Suisse Securities revised forecasts for the Brazilian real, saying the reform agenda was likely to be put on hold. They expect the currency to weaken to 3.50 in three months and 3.70 in 12 months, compared to 3.20 and 3.50 previously.

The sharp moves drove the market operator B3 to widen the limits on trading of several derivatives and put policymakers on alert.

The central bank sold $4 billion worth of new traditional currency swaps, increasing the stock of outstanding swaps by nearly a fourth from the current $17.7 billion.

Over the last two years, the bank has acted to reduce the amount of swaps, which function like future dollar sales to investors, from more than $100 billion by late 2015, to cut taxpayers' exposure to currency moves and limit market imbalances.

The National Treasury also swept to action, calling off an auction of fixed-rate and floating-rate bonds scheduled for Thursday and offering to buy or sell local notes in three extraordinary auctions in coming days.

Yields paid on Brazilian interest rate futures spiked as traders bet the central bank would be forced to cut rates at a slower pace as the reforms outlook dimmed.

Rate futures prices indicated traders saw a 79 percent chance that the central bank would cut the benchmark Selic rate by 50 basis points this month and a 21 percent chance of a 75 basis-point reduction. On Wednesday, most bets pointed to a cut of 125 basis points.

(Reporting by Bruno Federowski; Additional reporting by Claudia Violante and Patricia Duarte; Editing by Richard Chang and Cynthia Osterman)

By Bruno Federowski and Dion Rabouin

share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on BM&F BOVESPA SA
05/25 BM&F BOVESPA : Fintech company
05/23 BM&F BOVESPA SA : Dividend payable from reserves or sale of assets
05/17 BM&F BOVESPA : Notice to the Market - Clarifications on news report
05/15 BM&F BOVESPA : Investor Relations
05/12 BM&F BOVESPA : Notice to the market - market performance - abril 2017
05/09 BM&F BOVESPA : New Market Maker
05/09BM&F BOVESPA SA : quaterly earnings release
05/06 BM&F BOVESPA : Market Performance
05/04 BM&F BOVESPA : Welcome, Tenda!
04/26 BM&F BOVESPA : Notice to the Market - 1Q17 Earnings Results Schedule
More news
Sector news : Financial & Commodity Market Operators - NEC
05/24 EXCLUSIVE : London's gold benchmark hit by volatility after banks exit
05/23DJCITIGROUP : Nasdaq Team Up -- WSJ
05/22DJCITIGROUP : to Tap Nasdaq for Blockchain Payment Technology
05/22DJCME : Reaps the Benefits of Its Interest-Rates Empire
05/22 DEUTSCHE BOERSE : CEO seeks end to insider trading probe - Handelsblatt
More sector news : Financial & Commodity Market Operators - NEC
Financials ( BRL)
Sales 2017 2 581 M
EBIT 2017 1 550 M
Net income 2017 1 657 M
Debt 2017 397 M
Yield 2017 4,05%
P/E ratio 2017 20,49
P/E ratio 2018 17,69
EV / Sales 2017 15,4x
EV / Sales 2018 13,6x
Capitalization 39 371 M
More Financials
Duration : Period :
BM&F Bovespa SA Technical Analysis Chart | BVMF3 | BRBVMFACNOR3 | 4-Traders
Full-screen chart
Technical analysis trends BM&F BOVESPA SA
Short TermMid-TermLong Term
Technical analysis
Income Statement Evolution
More Financials
Mean consensus OUTPERFORM
Number of Analysts 14
Average target price 19,7  BRL
Spread / Average Target 2,9%
Consensus details
EPS Revisions
More Estimates Revisions
Edemir Pinto Chief Executive Officer
Pedro Pullen Parente Chairman
Cícero Augusto Vieira Neto Chief Operating & Product Officer
Daniel Sonder Chief Financial & Investor Relations Officer
Luís Otávio Saliba Furtado Co-Chief Information Officer
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
BM&F BOVESPA SA14.36%12 090
CME GROUP INC2.36%40 088
More Results