Petrobras Shares Have Lowest Value in Over 10 Years

12/16/2014 - 09h04

Petrobras's decision on Friday (12) to again postpone the release of the third quarter balance sheet destroyed the state-run company's shares, which dropped below the US$ 3.7 (R$ 10) threshold for the first time in over 10 years.

The company's preferred shares, which are the most traded, fell 9.2% this Monday (15), the biggest drop since Oct. 27, the first trading day after the election that gave victory to President Dilma Rousseff.

They ended the day quoted at US$ 3.4 (R$ 9.18), the lowest value since June 14, 2004.

As they fell more than 10%, the Petrobras shares were traded at auction for a period. This mechanism is automatic - it takes effect when a stock falls 10% - and is intended to prevent a stronger devaluation of the share.

The common shares (with voting rights) fell even more: 9.94% to US$ 3.1 (R$ 8.52) - the lowest value since Nov. 5, 2003.

In the absence of the balance sheet and the allegations of corruption, the devaluation of the fall in oil prices in the external scene and the cut on recommendations from large banks, such as Credit Suisse, also held a lot of weight.

For Eduardo Velho, chief economist of resource management firm Invx Global, the aversion to global risk should continue. "The movement is more structural (perennial) than cyclical. Do not expect recovery in commodity prices. With a stronger dollar, they should continue at a lower level in the coming years."

The collapse of Petrobras shares weighed heavily on Ibovespa, the main index of the Stock Exchange, which closed in a drop of 2.05% to 47.018 points, the lowest level since March 19.

Translated by JILL LANGLOIS

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