December 8, 2022
Werther Santana/Estadão

Shares drop 0.7% after Evergrande fails to pay US debt; The rise of the dollar – the economy

The typical cautious move ahead of the weekend this Friday, the 24th, is exacerbated by the return of concerns about the solvency crisis of the Chinese developer. Evergrande, after you no longer bear obligations in United State. As well as the main indexes abroad, as well as affected by the inflation preview in September, Brazilian Stock Exchange (B3) It closed down 0.69% at 113,282.67 points, ending a series of three trading sessions on the rise. In contrast, the dollar It rose 0.64% to 5.3438 Brazilian real, the highest closing level since August 23.

Global investors hold Evergrande bonds in dollars He did not receive the interest payment that should have been made on Thursday. The company had to pay $83.5 million in interest on the bonds with a face value of $2.03 billion.

However, the company can still make payments after the deadline: There is a 30-day grace period before bondholders can declare default. However, the missed payment would make way for what could be the largest dollar bond default ever by an Asian company, as I mentioned before Dow Jones Newswires.

From the point of view a job, The entire issue of Evergrande’s debt resolution is “far from clear.” The Dutch bank notes that there could be more twists and turns before a full debt restructuring, as Chinese officials seem to expect the real estate giant to solve its challenges on its own.

NS Jonas Goltermann, Capital EconomicasAlthough market sentiment has stabilized after the heavy selling of risky assets on Monday, the issue remains sensitive and should remain in focus for the next week.

“The outlook for next week still depends on how the government of China intervenes in the Evergrande, and how this recovery will be (for the company). Leverage and high debt,” he says. Peter Carvalho, Economist at Valor Investimentos.

He also added an extra dose of caution to China’s ban on bitcoin trading. “Bitcoin is initially down more than 5% and other major (virtual) coins are down about 10%,” he notes in a statement. Edward Moya, financial market analyst at Oanda in New York. “Bitcoin, Ethereum and Tether are specifically designated as non-tradable cryptocurrencies in China,” the analyst adds.

With risk aversion from abroad, the sectors and companies with the largest weight on the Ibovespa index, which yesterday showed a good recovery in general, returned to decline today, albeit moderately, they returned part of the recovery the previous day, the third in a row. on the home front, Inflation preview for September which rose by 1.14%, the highest level for a month since 1994Business hasn’t helped either, with some homes already forecasting 10% annual inflation, something we haven’t seen since 2016.

“The same problems remain on the radar as we approach October: high inflation and China’s Evergrande. Discomfort with inflation may help drive identification of important issues, such as court orders and progress on reforms. And the injection of resources into the financial system for China He suggests that authorities may treat Evergrande as “too big to fail,” and avoid systemic crises like the one in 2008, in United State‘, she says Victor Licariao, Director of Blue3 Stock Allocation.

Among the sectors with the largest weight in the index, losses among the major banks on Friday were between 1.34% to Bradesco ON and 2.79% for Santander. Among the mineral procedures, Valley On decreased 1.55% CSN It was down 3.59%, and Usiminas, by 2.16%, amid doubts about China’s economy. On the plus side, highlight Minerva, an increase of 4.52%, peterio, from 3.87% H JBSof 3.72%. Despite today’s negative performance, the Ibovespa It’s still piling up 1.65% for the week. In the month, he limits losses to 4.63%, which exceeded 8% in the worst moments of September – in the year, it fell by 4.82%.

exchange

The wave of global consolidation of the US currency – which rose in relation to strong and emerging currencies – directed the business in the local exchange market on Friday and led the dollar to consolidate above the level of 5.30 Brazilian Real, ending the week with a build-up. A rise of 1.17%.

The reason for the dollar’s rise this week is mainly due to Announcing the reduction of the US asset purchase program, a process called “tapering”, which may start as early as November, as head of Federal ReserveAnd Jerome Powell. Lowering the stimulus is in the dollar’s favour, as it makes US fixed income more attractive, reducing the attractiveness of emerging market papers.

“As far-fetched as the Fed may be, the reality is that we’re getting close to tapering, which won’t turn around in November if there’s any serious problem. The market is used to stimulus and that’s going to change,” Director of Strategy at Inversa Publications, Rodrigo Natali.

Reflecting the investors’ search for protection, the cash dollar worked at its highest level since the opening of the business, always above the 5.30 Brazilian real line, and reached a maximum of 5.3549 Brazilian real in the morning. In September, the dollar accumulated 3.32%. The dollar for the month of October rose 0.58% to 5.3435 Brazilian real.

no external, or DXY indicator – which measures the performance of the dollar against six strong currencies – is working at a steady rise at about 93,300 points. The US currency also rose as a block compared to emerging currencies and commodity-exporting countries, with emphasis on the South African rand (+1.52%) – which came from a better performance than its peers – and the Turkish lira (1.29%), still on the heels of the previously cut interest Turkish Central Bank yesterday. /Luis Eduardo Leal, Antonio Perez and Mayara Santiago