Ibovespa retreats with banks amid greater pressure after Chamber approves IR reform By Reuters

© Reuters. B3 in São Paulo REUTERS/Amanda Perobelli

By Paula Arend Laier

SAO PAULO (Reuters) – The retreated on Thursday, with financial agents reacting to the approval by the Chamber of Deputies of the main text of the project that changes income tax rules, with banks among the biggest negative pressures.

At 10:59, the Ibovespa fell 1.36% to 117,766.59 points. The financial volume totaled 5.4 billion reais.

After agreement, deputies approved by 398 votes to 77 the text that, among other changes, reduces the income tax to companies and individuals, establishes taxation on the payment of dividends and ends the tax benefit of interest on equity.

Highlights to the text should be voted on this Thursday by the Chamber, and the bill will be sent to the Senate for consideration.

“Now, we have to wait to understand which highlights will change the text and what the Senate’s willingness to continue with this reform,” said TAG’s investment director, Dan Kawa, in comments to clients.

In the Senate, also the day before, the plenary imposed a setback to the government of President Jair Bolsonaro by rejecting MP that promoted a kind of mini-labor reform and created the New Emergency Program for the Maintenance of Employment and Income.

For BTG Pactual (SA:), the behavior of the market reflects the reaction to the votes in Congress, associated with a degree of uncertainty, with emphasis on inflation and the possible effects of the water crisis on the economy.

“We are currently working with excessive volatility and without a definition of trend”, says a comment from the bank’s asset management area to clients.

In this context, the positive effect from abroad was in the background, with the North Americans and renewing maxims.


Itau Unibanco PN (SA:) lost 2.5% and Bradesco PN (SA:) fell 2.4%, given the potential negative effect of the end of the JCP mechanism on the results of Brazilian banks with the tax changes approved by the Clearinghouse, although analysts assess that the reduction in the IR rate can offset this impact. Santander Brasil UNIT (SA:) fell 3.2%.

Eletrobras ON (SA:) was down 3.8%, more than returning Wednesday’s gains, when financial agents responded to a new advance towards the privatization of electricity. The electricity sector index at B3 (SA:) showed a decline of 1.8%.

Petrobras PN (SA:) retreated 0.3%, despite rising prices abroad. The company said earlier that it assesses the financial impacts of the change on the company’s co-participation in the cost of employee health plans, which could reverse a 13 billion reais gain registered by the company.

Vale ON (SA:) lost 0.4%, in a negative session for the mining and steel sector on the Ibovespa, in another session of low prices in China. Gerdau PN (SA:) gave 0.9% before the company’s event with analysts and investors in the afternoon.

Suzano PN (SA:) rose 1.5%, among the few highs of the Ibovespa in this session, while rival Klabin UNIT (SA:) retreated 1%.

Assaí ON (SA:) advanced 0.5%, against the backdrop of the sale of two of five properties under an agreement announced in July involving a real estate fund managed by BRL Trust and managed by TRX, for 134.6 million of reais.