February 1, 2023
Petrobras (PETR4) and Banco do Brasil (BBAS3) closed higher on news that a change in state-owned law has lost force in the Senate

Petrobras (PETR4) and Banco do Brasil (BBAS3) closed higher on news that a change in state-owned law has lost force in the Senate

After dropping more than 10% in just three trading sessions, last Wednesday (14) was particularly negative for Petrobras shares (PETR3🇧🇷PETR4), shares of the state-owned oil company and Banco do Brasil (BBAS3) Record the day of recovery. This Thursday (15), PETR3 shares rose by 2.55%, to R$24.91, and PETR4 gained 2.65%, to R$22.04, while BBAS3 recorded gains of 2.83%, at R$31.95, after opening lower.

If it was the previous day, then Roles were greatly affected by the rapid passage of changes in state-owned laws By the House of Representatives, this time the news that these amendments may not pass in the Senate strengthens assets, although it is far from correcting the losses of the past three cycles. between changes approved by the Chamberthere is a reduction in the “sabbatical” period a person has to wait to take up a position in a state-owned company after participating in party decisions from three years to a period of only one month.

According to information from XP Política and Arko Advice, the Senate must make the changes in the “sauce”.

Arko points out that Thursday’s Senate agenda does not bring PL 2896/22, which amends the law. According to sources heard from Arko, the trend is that the project has not been voted on, and PT senators have asked Senate President Rodrigo Pacheco not to direct the bill, because they believe the exposure has been too negative for the party.

They always want to change the law of the country. They agreed and played on the account of PT, Mercadante. We don’t need this change now [Aloizio] Mercadante takes over BNDES. “There are other paths,” said a source at PT Consulting.

Are SOEs Better Protected Today?

XP Politics notes that, without prior planning, MPs’ vote on Tuesday night did not come from Labour’s initiative, according to several of the parliamentarians involved in the approval. It was the Centão members who took advantage of the discussion regarding the possible ban on the name Mercadante in order for the BNDES to vote on the matter, facilitating political appointments in the federal and state governments.

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“Lola’s legal team is against the manipulation of state-owned law at this time. He notes that there is an assessment that there are points that need to be reviewed, but not on a case-by-case basis as happened in the constituency.” According to the analysis team, PT members understand that there is a need for adaptation at this stage in nominations for state companies, but it must be done in the chair (that is, after taking office), with clear technical arguments, well-communicated and out of a controversial statement.

The experts concluded, “The reading is that the state-owned law was passed at a time of heightened political criminalization and that state-owned enterprises have already internalized a level of governance that allows for some flexibility.”

In this sense, it should be noted that analysts still see Petrobras and BB with their corporate governance still protected even with the change in the law.

The original text of the law, enacted in 2016, was also included in the government of Michel Temer, with a 36-month quarantine for those involved in party decisions, in a similar way in the internal regulations of Petrobras, Andre Pieper, professor of executive education programs at FGV, told Reuters.

This, in a way, gives some protection to corporate governance from the interference of politicians. The professor pointed out that the final change in the rules of the state-owned oil company is not an easy matter and will have to be proposed by the board of directors at a meeting of shareholders, pointing out that such a move can generate a lot of wear and tear. tearing up in the face of questions that would be asked by segments of society, including multiple minority groups.

In the case of Banco do Brasil, Goldman Sachs noted that the company also has devices in place to ensure corporate governance even in the event of a change in the law.

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“We stress that other provisions included in Banco do Brasil’s succession policy were not discussed in the process of approving the amendment of the state-owned law, such as the minimum number of years of experience or union relations. (…) While we are aware of the potential risks related to changes in the designated management By the government, we believe the bank is better protected against major changes in its strategy than in the past due to succession policy and other improvements in corporate governance,” reinforces Goldman, which has a buy recommendation for the assets.

Goldman maintains that the shares are listed on B3’s Novo Mercado, which is the highest standard of corporate governance. This includes only common shares, each with one vote, regardless of shareholder, plus full mark along rights. In addition, four out of the eight directors are independent, two of whom are minority shareholders. The CEO must have at least 10 years of experience in a senior position in the public or private sector or four years as a board member or similar role.