Sabesp’s shares are down by more than 3% after Friday’s jump; Vale falls with ore, Petrobras and PetroRio rise with oil

SAO PAULO – Sabesp’s shares (SBSP3) are the highlight of the fall, with a decrease of more than 3%, after a surge of more than 10% on Friday.

The governor of São Paulo, João Doria (PSDB), said on Saturday that Sabesp will be prepared to be privatized in the coming years, and that the government will not do anything rashly. He commented on the statements by the newly appointed secretary of Projects and Strategic Actions of São Paulo, federal deputy Rodrigo Maia (no party-RJ), about the privatization of the company, noting that the privatization of the sanitation company is a “long-term project” term”, not short term.

Vale’s assets (VALE3) have a drop of around 1% in a new low session for iron ore, but steel company shares are advancing, with emphasis on Usiminas (USIM5). In a report, Credit Suisse highlighted that it prefers Usiminas and CSN to shares of mining companies at the moment.

Oil papers are also advancing, with emphasis on the increase of around 3% in PetroRio (PRIO3), while Petrobras (PETR3;[PETR4]) goes up more than 1%. Oil prices jumped 3% on Monday, recovering from a seven-day streak of losses, supported by the weaker dollar, despite demand concerns caused by the increase in the number of cases of the Delta variant of the coronavirus.

Azul (AZUL4) shares, on the other hand, continue with gains this Monday (23) after rising 2.67% last Friday (20). The rise was motivated after the news of the American newspaper Wall Street Journal, citing sources, that Azul has been talking to creditors to buy the operations of rival Latam in Brazil.

According to the publication, Azul would be open to buy the entire company and then sell operations in other countries. The Brazilian company would also be open to a possible joint venture with Latam to complement its current business in Brazil, according to the newspaper’s sources. See more by clicking here.

Check out the highlights:

Alliar said the shareholders’ agreement now represents 50.46% of the company’s shares, with more shareholders adhering to the agreement.

Vale (VALE3), steel and iron ore

The most traded iron ore contract in Dalian for January 2022 closed down 1.1% at RMB 757/tonne, hovering around a seven-and-a-half-month low as production controls steel industry and the restrictions caused by Covid-19 in China weigh on the market’s enthusiasm.

On the Singapore stock exchange, the most active iron ore contract, for September, retreated 1.5%, to 136.60 dollars a ton.

“The prospect of lower blast furnace production in the second half of 2021 compared to the first is now a reality, although iron ore shipments from Australia continue to disappoint,” said Atilla Widnell, managing director of Navigate Commodities, which maintains a medium-term target of $140 to $170 a ton (CFR) for delivery to China.

Coke and metallurgical coal futures contracts traded in China on Monday reached their daily highs of 8% and renewed record highs, as market rumors about a suspension of Mongolian coal imports due to the pandemic Covid-19 fueled fears of a tighter supply of steel raw materials.

The most traded contracts for coking coal and coke on the Dalian commodities exchange for January 2022 climbed to highs of RMB 2,421 (US$373.01) per tonne and RMB 3,053.50 per tonne, respectively.

EZTec said on Friday that its board of directors has approved a repurchase program of up to 5,035,897 shares.

The program has a term of up to six months, ending on February 23, 2022. The amount referred to is equivalent to approximately 5% of the company’s shares outstanding in the market.

BR Properties (BRPR3)

BR Properties announced that it had ended its share buyback plan. It obtained 99.95% of the assets it had proposed to buy, with 10,994,600 shares being acquired for R$ 94.888 million, with an average cost per share of R$ 8.63.

Movida, in turn, approved a buyback program for up to 12,335,379 shares.

A unit of Minerva Foods in Palmeira de Goiás (GO) was searched and apprehended by the Federal Police (PF) as part of Operation A Posteriori, which investigates alleged irregularities of federal agricultural tax auditors in the period 2018 to 2019, the company informed in Friday.

According to the company, the procedure, carried out on the farm, had the cooperation of Minerva employees and the plant maintains its regular activities. “There is no indictment or accusation against the company, against its administrators or any of its employees or collaborators within the scope of the operation,” he said in a statement.

The governor of São Paulo, João Doria (PSDB), said on Saturday that Sabesp will be prepared to be privatized in the coming years, and that the government will not do anything rashly.

Commenting on statements by the newly appointed secretary of Projects and Strategic Actions of São Paulo, federal deputy Rodrigo Maia (no party-RJ), on the privatization of Sabesp, Doria stressed that the privatization of the sanitation company is a “long-term project” term”, not short term.

“Our government is privatizing… Sabesp is already publicly traded, listed on the stock exchange, with very good performance and well managed. Over the next few years, it will evidently be prepared for a privatization program, but we will not do it rashly”, commented Doria to journalists in Rio de Janeiro. Maia’s statements made Sabesp’s actions soar on Friday.

Braskem announced that it is not aware of the holding of a public offering of the company’s shares as a possible exit strategy for shareholders, in a clarification after the Broadcast column.

The company says that “it is not part of any discussions by its shareholders about the sale of their shareholdings”, according to a statement sent to the Brazilian Securities Commission (CVM), as a clarification of news published in the media.

Recommendations

Morgan Stanley began hedging Smart Fit’s shares with an overweight recommendation (exposure above the market average) and a target price of R$32, an increase of 15% compared to the close of Friday (20).

Last Friday, the InfoMoney talked to Edgard Corona, founder and CEO of the business, about the path to the initial public offering; the impact of the pandemic on business; and plans after the IPO. Check it out by clicking on the link below.

Bradesco BBI began coverage for CBA (CBAV3) with an outperform recommendation (a performance above the market average) and a target price of R$19, or an increase of 73% compared to Friday’s closing.

BBI also started coverage for Banco Pan’s shares (BPAN4), with an outperform recommendation (perspective of appreciation above the market average) and target price of R$ 26 for 2022 for BPAN4 shares, upside potential of 35% compared to closing Friday.

The bank’s analysts highlight a positive view due to the ecosystem that has been built by Banco Pan for products and customers, the existence of a relevant market for its services in Brazil, with 138 million customers and R$1.2 trillion in loans for a population not yet fully served; strong customer growth, with more than 40,000 daily additions in the second quarter; expected growth above average income, with expected annual compound growth rate (CAGR) for the period between 2021 and 2023 of 35%, compared to 10% on average for banks covered by Bradesco.

Itaúsa (ITSA4), Itaú (ITUB4) and XP

Itaúsa, continuing the news about Itaú’s investment in XP, informed that the extraordinary general meetings – with the objective of deliberating on the incorporation of the companies – will take place on October 1st.

Considering the fixing of the date of the EGMs and the cancellation of shares issued by XPart in treasury, the final exchange ratio will be 43.3128323 shares issued by XPart for 1 XP class A share, or 1 BDR for 1 also class share A. Once the merger is approved, Itaúsa will hold 15.07% of XP’s total capital and 4.74% of its voting capital.

IPOs

Victoria-based cybersecurity firm ISH Tech has filed for an initial public offering (IPO) in search of funds to finance its organic growth and acquisitions, as well as investing in research. The company was founded in 1996 as an IT consultancy.

(with Reuters and Estadão Content)

Free course teaches stock exchange consistency to earn and monetize capital. Participate!