Ibovespa Futuro rises after sharp drop the day before, but fiscal fear limits gains

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SÃO PAULO – Ibovespa Futuro registers a slight increase on Tuesday (29) with a recovery in sales recorded the day before, but still limited by the persistence of investors’ disappointment due to the announcement of the Citizen Income program by the government.

The decision to finance the replacement of Emergency Aid with resources from the payment of precatorios and Fundeb sounded like a tax pedal and the Brazilian Bar Association (OAB) has already declared the idea unconstitutional.

In the Federal Court of Accounts (TCU) and in Congress, the two government proposals were seen as a form of “creative accounting”, the same strategy used by the Dilma Rousseff government to improve the country’s fiscal result, according to Folha de S.Paulo.

The lack of clarity about the creation of a new tax on digital financial transactions along the lines of the CPMF was also frowned upon. Economy Minister Paulo Guedes said that the idea is being discussed, but there is no consensus on the use of the instrument to offset the payroll tax exemption.

International stock exchanges today operate with slight lows after yesterday’s surge. The caution is motivated by the first presidential debate in the United States at a time when the world has reached one million deaths from the coronavirus.

At 09h18 (Brasília time), the future index for October had a slight increase of 0.47%, to 94,940 points.

Meanwhile, the US dollar futures with the same month of maturity registered a fall of 0.36%, to R $ 5.661.

In the future interest market, the DI for January 2022 rises three basis points at 3.14%, the DI for January 2023 advances seven basis points at 4.65%, the DI for January 2025 is up six basis points at 6.71% and the DI for January 2027 recorded a positive variation of six basis points at 7.71%.

Expectations abroad also fall on the stimulus to the United States’ economy influencing investors. Last night, Democrats unveiled a $ 2.2 trillion stimulus package, smaller than initially proposed, but above what Republican leaders offered.

In Europe, the pound is advancing amid speculation that successful Brexit trade negotiations could help protect the United Kingdom from a confused break with the European Union.

Controversy of Citizen Income

Investors will continue to follow in the footsteps of the federal government, after a day of strong market turmoil. The announcement of measures to finance the government’s new social program, called Citizen Income, fell so badly in the financial market that advisers close to President Jair Bolsonaro began to advocate a change, according to G1. The idea would be to abandon the roll of precatories to pay for the new social program, according to the portal.

The proposal to roll over the payment of court orders was criticized by several fronts of society. Even without the lock, this debt stock related to these judicial decisions already exceeds R $ 70 billion, according to the leaf. The Brazilian Bar Association (OAB) released a note saying that postponing the payment of court orders is unconstitutional.

The idea of ​​using funds from the fund for basic education (Fundeb) also displeased. Entities such as the Brazilian Basic Income Network and Todos pela Educação warned that the idea is unconstitutional, according to Estadão.

In the Federal Court of Accounts (TCU) and in Congress, the two government proposals were seen as a form of “creative accounting”, the same strategy used by the Dilma Rousseff government to improve the country’s fiscal result, according to Folha de S.Paulo.

Among the assistants of Minister Paulo Guedes (Economy), the solution was also seen as a “pedaling”, according to the newspaper. Assistants to the Mayor, Rodrigo Maia (DEM-RJ) and opposition leaders made the same criticism.

Yesterday, the reaction was so negative that the leader of the government in the Chamber, Ricardo Barros (PP-PR) held a conference call with financial market participants to understand the reading of the market, according to Economic value. The Ibovespa index was down 95 thousand points, while the dollar rose to R $ 5.63, and the future interest curve became stressed.

According to Estadão, limiting the payment of the precatorios to 2% of the current net revenue may free up to R $ 40 billion for the new social program of the government, the Citizen Income, according to calculations of technicians of the Legislative. However, the newspaper showed that a similar proposal has already been declared unconstitutional by the Federal Supreme Court (STF).

New CPMF postponed

Another important theme is the creation of a new payment tax, similar to the old CPMF. So far, the idea has not received necessary support from President Bolsonaro’s parliamentary base.

Thus, according to leaf, the delivery of the second phase of the tax reform proposal was postponed again. According to the government leader in the Chamber, the Executive will only present the text if there are 340 favorable votes.

In addition, the news that the federal public debt increased 1.56% and reached R $ 4.412 trillion in August is noteworthy. Although certain indicators show improvement due to a more favorable external environment, the National Treasury states that there is uncertainty for investors about Brazilian public accounts. This has limited numbers and pressured interest rates in the long run, according to leaf.

Regarding the vacancy in the Supreme Court (STF), the expectation is that Bolsonaro will make a statement at the last minute to prevent the chosen name from being exposed to public wear and tear. This is because the anticipation of Celso de Mello’s retirement generated pressure from political, legal and evangelical groups on President Bolsonaro, according to the Estadão. In the Senate, the expectation is that the appointment will occur around October 15.

Another focus of attention is the decisions announced yesterday by the National Council for the Environment (Conama) overturning protection against deforestation in mangroves and sandbanks. Soon after being presented, the measures were the target of a series of judicial questions, according to Estadão.

Corporate Radar

In the corporate sphere, Boa Vista confirmed a price of R $ 12.20 per share in an IPO, in the center of the indicative range, in an offer that moved R $ 2.17 billion. Hapvida announced the purchase of the Santa Filomena Group for R $ 45 million, while Vale reported the payment of US $ 5 billion of its revolving credit lines due in June 2022 and December 2024.

The IRB is preparing an issue of simple debentures, in two series, in the amount of up to R $ 900 million. In addition, Braskem was assessed by the Instituto do Meio Ambiente de Alagoas, while CCR and EzTec will pay dividends.

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