Petrobras Shares Down 17% After Brazil President Replaces CEO With Retired Army General

Reuters  |

Image: Jair Bolsonaro. Source: Isac Nóbrega/PR, CC BY 2.0, via Wikimedia Commons

RIO DE JANEIRO (Reuters) - Petrobras shares traded in New York plunged nearly 17% in premarket trading on Monday as analysts cut ratings on the stock after far-right Brazilian President Jair Bolsonaro moved to replace the state-controlled oil company’s market friendly CEO with a retired army general.

Credit Suisse, Scotiabank, Bank of America, Bradesco and XP analysts were among those who downgraded their recommendations on shares of Petróleo Brasileiro SA, as the Rio de Janeiro-based producer is known.

XP analysts said investing in Petrobras is no longer defensible after Bolsonaro’s sudden decision to replace CEO Roberto Castello Branco. “There are risks to the company’s independence and ability to continue pricing its fuel to international parity.”

Bolsonaro announced the nomination of Joaquim Silva e Luna to replace current Branco to head Petrobras on social media after the market close Friday.

The former general said in an interview with Radio Bandeirantes on Monday morning that he had not discussed or has an opinion on an eventual privatization of the company.

On Saturday, Silva e Luna told Reuters that the company needed to find “balance” in fuel pricing, considering the impact on shareholders, investors, sellers and consumers.

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Reporting by Sabrina Valle, editing by Louise Heavens and Jason Neely.

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Source: Reuters

Stock price data is provided by IEX Cloud on a 15-minute delayed basis. Chart price data is provided by TradingView on a 15-minute delayed basis.

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