February 1, 2023

Magalu (MGLU3), Via (VIIA3) and Americanas (AMER3) jump 20% in two trading sessions with bigger tax breaks

Shares of white-goods and e-commerce-related retailers, which have been discredited by stock exchange targets and cascading downgrades to recommendations, have been higher in the last two trading sessions, reaching gains of more than 20% in the period. This Tuesday (20), Via assets (VIIA3(increased by 10.81% to 2.46 BRL, US)Amer 3) gained 5.80%, at R$9.18, while Magazine Luiza (MGLU3) rose 8.05% to 2.82 Brazilian reals. Thus, even away from today’s highs, they have accumulated in two trading sessions in a row by 28.8%, 19.2% and 19%, since they already made strong gains the day before.

The move comes after a relief in the yield curve from the previous day, which boosts stock growth (more sensitive to rates) amid upcoming news from politics which also boosts Ibovespa for the second day in a row.

On the eve of this, there was a repercussion in the market to remove the Bolsa Família from the spending cap, on Sunday night (18), by order of the Minister of the Supreme Federal Court (STF) Gilmar Mendez. The result of the secret budget experiment was deemed positive, which eased rates throughout the day. Short heads closed up to 5 bp, and medium and long heads, between 5 and 6 bp.

This Tuesday, continuing the movement and also with the negotiations for the Transitional PEC in the room, today was once again a good day for the markets, with lower interest rates for the longer term. The DI maturity due in January 2024 is down 15 basis points, to 13.78%, in 2025 is down 37 basis points, to 13.36%, 2027 is down 44 basis points, to 13.19%, while in 2029 is down 38 basis points, to 13.17 %.

Earlier, there was an expectation of a dry up in the PEC transition, which would mark a mitigation of the financial risks that have greatly increased market aversion in the past sessions.

The leaders of the House of Representatives on Tuesday morning closed an agreement to reduce the transition period from two years to one, while preserving the value of R$145 billion to pay the Bolsa Família and fiscal space above excess revenues, MP Claudio Cajado (PP-BA) announced after a meeting of parliamentarians, including the president. Municipality, Arthur Lyra (PP-AL), with members of the elected government.

“There will be a Novo highlight, but basically it will be for a year, that was the majority opinion in the room. International loans will be removed from the text and 145 billion will remain for PEC plus fiscal space at 6% on top of excess revenue and 23 something ( bn) regarding PIS / Pasep. The text was basically like this, with a validity of one year, Kagadu told reporters after the meeting.

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Asked if the PEC would be approved by the Chamber in Tuesday’s vote, the deputy said that was the expectation, as the agreement was sealed by the leaders of all parties.

“The feeling is that there is this unanimity. In fact, there has always been a unanimity to vote on the PEC, and discussion was the value and the term,” he said.

The Senate Presidential Election Commission was approved easily, and the Transitional Presidential Election Commission was bumping into several political negotiations in the chamber, including the cabinet formation of the government of President-elect Luiz Inacio Lula da Silva and the ruling by the Supreme Federal Court (STF) that toppled the so-called secret budget.

It should also be noted that the low liquidity due to the approaching end of the year holidays tends to make the movements more noticeable in the stock exchange.

TC Economatica highlights the need to warn investors of the risks of lower liquidity and volume, noting the sharp rise in assets of retail traders, but their low trading volume.

The house indicates that Petrobras (PETR3🇧🇷PETR4) in 2022, an average of R$2.6 billion per day. Yesterday only R$1.4 billion was traded, 45% below the average for the rest of the year. “This may actually point to a Christmas rally pattern, which brings in higher liquidity stocks that are losing liquidity and volume due to the exit of large institutional investors,” he assesses.

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However, in the case of Magalu, there was trade per night 8% higher than the average for the year, with trade of R$763m the previous day, against R$705m on average. By trading yesterday 70% higher than the average of the year, R$349m, compared to the average of R$205m for the year.

It should be noted that there is still a lot of caution on the part of investors with regards to retailers, with analysts revising the outlook mainly to the downside with an eye on the complex macroeconomic scenario and the view that interest rates will take longer to come down and remain higher for a longer period of time than before. . Priced before the election. in recent weeks, Goldman Sachs🇧🇷 Morgan Stanley🇧🇷 BB Investimentos and Itaú BBA They revised the discounted estimates of one or more companies in the industry.

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