Petrobras Has Lost the Most Market Value Since 2010, Says Survey

11/26/2014 - 09h15

Involved in allegations of corruption and often criticized for its management model, Petrobras was the company that lost the most market value during Dilma Rousseff's government, according to a survey conducted by consultancy Economatica.

The study considers the nominal value (without inflation) of the 272 BM & FBovespa companies traded from December 31, 2010 to November 24, 2014.

Petrobras' R$ 380.2 billion (US$ 149.9 billion) initial value plunged more than R$ 200 billion (US$ 79 billion), reaching R$ 179.6 billion (US$ 70.97 billion).

Economists heard by Folha attribute the state-controlled oil company depreciation to its use as a political instrument to control matters as the price of gasoline and contain inflation.

The company buys oil and its products abroad at higher prices than it sells in Brazil, which affects the corporation's accounting.

"Petrobras was called to help the country beyond the interests of the shareholders and that harmed the company", says André Perfeito, Chief Economist of Gradual Investimentos.

Julio Hegedus, Chief Economist of consulting firm Lopes Filho, says Petrobras' share value is "extremely low" and "will not get worse".

Petrobras most traded share reached R$ 40.25 (US$ 15.9) in May 2008. On Tuesday (25), it was sold at R$ 14.15 (US$ 5.6).

"The price is likely to rise in the long term, but it will depend on government measures, especially regarding gasoline price", adds Hegedus.

Personal finance advisor Mauro Calil recommends cold blood to Petrobras investors, despite the recent depreciation.

"If investors sell at a lower price than purchased, they will lose", says Calil. "New investors should only buy its shares considering a long term return on investment, as its recovery might take from four to six years."

The survey conducted by Economatica also showed that two other Brazilian companies-Vale and OGX- are among the biggest losers over the past four years.

Vale was mainly affected by China's slowdown, an important iron ore buyer, according to analysts.

OGX was hit by the bankruptcy of its owner, the entrepreneur Eike Batista.

The biggest Brazilian winners were Ambev and Bradesco. They are currently the country's most valuable companies.

"The companies that focused on domestic activity and sales were successful", says Julio Hegedus, Chief Economist of Lopes Filho.

Translated by JULIANA CALDERARI

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