Petrobras and Vale shares fall with commodities down; CSN advances in the pre-result session and JBS continues high the day before

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SÃO PAULO – The session this Thursday (15) is almost generalized low for Ibovespa, with the number of contaminations by the coronavirus increasing in Europe and the impasse on the stimulus package in the USA.

Among the casualties of the index are, PetroRio (PRIO3), Petrobras (PETR3; PETR4) and Vale (VALE3) amid the fall in commodities. Oil futures contracts fall more than 3% as new restrictions imposed by the world to try to stem the spread of Covid-19 infections increase uncertainty about the prospects for economic growth and recovery in fuel demand. With the imposition of restrictions returning to the radar, the shares of airlines, such as Azul (AZUL4) and Gol (GOLL4) also fall.

Iron ore futures increased losses on Thursday and the reference contract on the Dalian stock exchange touched a new two-week low, with increasing stocks of material at ports and the weakening of physical demand for steel products weighing on sentiment. from the market.

The most traded iron ore contract on the Dalian stock exchange, for January 2021, ended in a 2.2% drop at 787.50 yuan per ton. The contract dropped to 783.50 yuan earlier in the session, the weakest level since September 30.

Banks also registered a decline, as in the case of Santander (SANB11), Itaú Unibanco (ITUB4), Bradesco (BBDC3; BBDC4) and Banco do Brasil (BBAS3). In addition to the negative external scenario, on the companies’ radar is the disclosure the day before by the Central Bank of the ranking of registered users by institution for their instant payment program (PIX).

“In general, the result was negative for the banks under our coverage, both due to the high number of keys registered and the poor performance of incumbents. 33.7 million keys were activated in the first 10 days of registration, a number well above our expectations and which may imply a greater chance of success for the program. In addition, the ranking showed a small market share of 35% for the incumbent banks, while Nubank alone had a 24% share. MercadoPago and PagSeguro also achieved a surprisingly good market share of 27%, probably benefited by traders ”, points out Marcel Campos, an analyst at XP Investimentos.

Despite the bad figures for the banking sector, the analyst continues with a positive outlook regarding banks regardless of what happened, since it was already assumed that retail rates will drop systematically, “and therefore we believe that such an event is already priced”.

Among the few highs in the index is CSN (CSNA3), which opens the third quarter results season after the market closes, amid the expectation of strong numbers for the company. JBS (JBSS3) also extends the strong rise of the previous day, albeit in a more modest way; in the fourth, the papers were driven by the agreement of J&F, a company controlled by the company, with the United States Department of Justice to pay a $ 128 million fine in a case derived from Lava Jato.

The companies “X” OSX (OSXB3) and MMX (MMX3) also returned to investors’ radar in the session, continuing with the heavy losses recorded the day before after registering a strong rally until the session on October 13th.

Check out the highlights:

The Attorney General’s Office on Wednesday denounced the governor of Mato Grosso do Sul, Reinaldo Azambuja (PSDB) and Joesley Batista and Wesley Batista, from JBS to Justice, in addition to 21 other people. The group is accused of active and passive corruption, money laundering and criminal organization.

The MPF states that the scheme started in 2003, but focuses on the complaint between 2014 and 2017, when the governor and other defendants would have received R $ 67 million in kickbacks. In return, public agents would have guaranteed tax exemptions and benefits to JBS in amounts above R $ 209 million. The MPF asks for conviction for crimes, the loss of public office for those in the government and indemnity for collective moral damages in the amount of R $ 277 million.

The case will be judged by the Superior Court of Justice, since Governor Azambuja has a privileged forum. In a note echoed by the G1 portal, Azambuja stated that he received the complaint with indignation, and that he waited for the opportunity to “assert the right to ample defense, until this moment not granted”.

According to Bloomberg, JBS declined to comment and said the matter is the responsibility of J&F. J&F did not immediately respond to Bloomberg’s request for comment.

It is worth noting that, the day before, J&F, the holding company that controls JBS, announced on Wednesday that it closed an agreement with the United States Department of Justice to pay a $ 128 million fine in a case derived from Lava Jato. The company pleaded guilty to violating US anti-corruption legislation. As a result, the stock rose more than 9% the day before.

Free Market (MELI34)

The Argentine e-commerce group MercadoLibre Inc. announced that it should break a record of R $ 4 billion in investment in Brazil in 2020, and that it plans to increase this value in 2021. The investments are part of a plan to strengthen the logistics infrastructure in a moment where the new coronavirus pandemic drives online sales.

Natura &Co (NTCO3)

Natura & Co had its rating upgraded by S&P from BB- to BB. The agency cites the fact that Natura & Co Holding raised about $ 5.6 billion in its public offer for primary distribution (follow on), most of which will be used to reduce Avon Products’ debt.

The agency says there are risks with an operational overhaul by Avon and a potential second wave of covid-19, but comments that general demand in the cosmetics market has recovered faster than its expectations. For S&P, the group has recorded “solid results” in recent months, thanks to digital sales.

Recommendations

Credit Suisse started coverage for Burger King Brasil (BKBR3) shares with an outperform recommendation (performance above the market average) with a target price of R $ 14 (upside of 30%). The same bank also started coverage for Pague Menos (PGMN3), also with an outperform recommendation and a target price of R $ 13.50. This week, Santander and JPMorgan started coverage for PGMN3 assets with the same recommendation.

Credit pointed out that Pague Menos debuted on the Stock Exchange in September 2020 and is the third largest pharmacy chain in Brazil, with leadership in the North and Northeast, where it has 10.5% and 20.5% of the market, respectively.

The bank says Pague Menos is in a position to boost its growth, with a healthy capital structure and initiatives to increase productivity and Ebitda margin.

Regarding the Brazilian restaurant sector, Credit highlighted a special focus on the fast food sector, which has revenues of R $ 100 billion in the country. The bank claims that about 18% of Brazilians’ monthly income is spent on food, and that changes in society have increased the share of that amount spent on street meals from 24% to 33% over the past 15 years.

The bank estimates that the covid-19 crisis caused many restaurants to close and others to adapt. And he believes that large chains tend to offer cheaper meals. Fast food chains are more resilient, and tend to benefit from digital platforms to reach consumers.

In addition to starting coverage of Burguer King Brasil in outperform, he started covering Arcos Dourados (NYSE: ARCO), owner of the McDonald’s brand, with a neutral assessment.

After being questioned by several investors, the Brazilian Securities and Exchange Commission (CVM) decided to open a process to analyze the UBS BB report on the actions of IRB Brasil.

At the beginning of the month, on the evening of the 5th, UBS BB resumed the coverage of the IRB papers, recommending a sale with a target price of R $ 4.60; the reinsurer’s shares fell 17.11% the next day.

Ânima Educação reported that, to date, it has not been notified by Laureate as to which of the proposals formulated by the competitors would have been chosen as the most advantageous.

The clarification has in mind the news published in the press that Laureate would have chosen the education company’s proposal to compete with another institution for the Group’s assets in Brazil, within the scope of the structured sale process of said assets.

“Ânima Educação reiterates, as communicated to the market presented on 8/10/2020, that
presented a proposal for the acquisition of Laureate’s assets in Brazil, which is in total
consistent with its widely publicized positioning, constant analysis of opportunities
the market, especially in this case, considering that Brazil is a continental country and Ânima
Education has the mission of transforming the country through Education. In any case, the outcome on the conclusion of any legal transaction is an exclusive decision of the Laureate Group and is beyond the control of the competitors, ”he said in the statement.

The company informed that it will keep the market informed about the evolution of the structured process
dealt with in this material fact and remains available for any clarifications or
suggestions through RI.

It is worth mentioning that Itaú BBA reiterated the recommendation of Anima Educação (ANIM3) shares in outperform (with performance above the market average). The bank pointed out that Anima included 14,600 new undergraduate students in the second half of 2020, 4.6% less than the same period last year, but in line with estimates. Itaú BBA stressed that, even with the pandemic, Anima has an organic growth of the total number of students of 2.8%, reaching 116 thousand in 2020.

With strong volatility in October and a drop of 52.78% for MMXM3 and a drop of 28.57% for OSXB3, the companies issued statements.

Amid the CVM’s questions about the fluctuation of securities, MMX reiterates its belief that the recent atypical fluctuations are related to the relevant fact disclosed on September 30, 2020, in which it filed a petition with the court of its judicial recovery, seeking to recover the asset Emma Mine, whose exploration can be of great economic relevance for the company.

“The company found that in the last few days several journalistic articles were published
commenting on the fact relevant to the recent appreciation of the shares. The published articles may have contributed to the increase in trading volume and share prices. The company reiterates that it is not aware of any other relevant act or fact that could justify the atypical fluctuations identified by B3 ”, he pointed out.

OSX reported that it received correspondence from Roberto Lombardi de Barros informing about the sale of 114,100 common shares issued by the company, so that it now holds a 3.97% interest in the company’s share capital.

Credit Suisse reduced its estimates for Rumo Logística’s Ebitda in 2020 and 2021 by 8.1% and 6.8% respectively. The company’s shares fell 14% during the past month. The bank says the drop in prices may have been due to short-term competitive pressure, risks to crops due to the weather and rising interest rates in the long run.

Movida Participações approved a new issue of R $ 600 million in debentures.

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(With Reuters)



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