On the same day that the economic team revised the projection for GDP growth for 2020 from 2.4% to 2.1%, Economy Minister Paulo Guedes said the result could be even worse because of the coronavirus pandemic. In the worst scenario, GDP will be 1% if the pandemic takes over Brazil. It would be the fourth straight year of low growth after the recession.
Brazilian agribusiness exports in February fell 6.3% compared to the same period in 2019. The sector’s trade balance in the month was $5.35 billion. Sales totalled $6.41 million, while imports totalled $1.06 billion. The share of agro in the total foreign sales in Brazil was 39.2%. Exports of soybean oil, meat, cotton and sugar and alcohol complex (sugar and alcohol) had a favourable performance in the result, according to the government.
The declaration of the coronavirus pandemic by the World Health Organization (WHO) solidified the negative scenario for global and domestic assets. The circuit breaker mechanism was activated at B3 after the Ibovespa reached a 10.11% drop. On the return, the index deepened the fall to more than 12%. At the close, it fell 7.64%, to 85,171 points. The dollar closed up 1.65% to R$ 4.7215.
The subsidiaries in Brazil of the Spanish Telefónica and the Italian Tim announced this Wednesday their interest in jointly buying the mobile business of the Brazilian group Oi. Oi is the fourth largest operator in the Brazilian market, with a share of 16.2% and 37 million mobile customers. Oi mobile assets are valued, in total, at approximately R$18 billion ($4.5 billion).
In the first annual balance of BR Distribuidora after privatization, the company’s profit was R$ 2.2 billion ($488 million), against R $ 3.2 billion ($712 million) in 2018, a drop of 31.2%. In the fourth quarter, profit was R$ 96 million ($ 21 million), below the profit of R $ 1.6 billion ($ 400 million) registered a year ago. Net sales revenue fell 2.8% last year, to R $ 94.9 billion ($ 24 billion) compared to 2018, while the company’s net debt rose 87.3%, to R$ 4.4 billion ($ 1 billion)
The Brazilian Development Bank (BNDES) offers around R$100 billion ($20 billion), that can be used to support the private sector. This cash list shows, that there is room for stronger action by public banks (BNDES, Caixa and Banco do Brasil) in credit. The BNDES money was reformed in February, with the sale of Petrobras’ common shares, in which the bank pocketed R$22 billion ($4 billion).
The Brazilian market recover partially from the impact of the collapse of oil prices and the outbreak of covid-19. The Ibovespa, the main index of the Brazilian stock exchange, closed up 7.14%, at 92,214.47 points, the highest daily appreciation since 2009. With that, it partially recovered from the historical fall of more than 12% registered on Monday.
Brazilian industrial production raised 0.9% in January, in comparison with December, reported the Brazilian Institute of Geography and Statistics (IBGE). The result interrupts two months of decline in the sector, a period in which the accumulated loss reached 2.4%. It was the best January since 2017, when it stood at 1.1%, and the strongest monthly advance since October 2019, when it also rose 0.9%.
The largest car rental company and fleet manager in Brazil, had profit growth in the fourth quarter, Localiza announced that it had consolidated net profit of R$228.4 million ($45.8 million) from October to December, an increase of 25.9% compared to the same period in 2018. The company’s operating result measured by Ebitda totalled R$629.6 million ($126 million), an increase of 40.2% year on year.
Mining company Anglo American signed a contract with Atlas Renewable Energy to buy 70MW of solar energy, as it aims to acquire 100% of its electricity from renewable sources by 2022. According to Anglo American, Atlas invested R$881 million ($176 million) in a solar plant to achieve the contract, which will have more than 800,000 panels and an installed capacity of 330 MWp.