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Credit Suisse, Santander, Scotiabank, Bank of America, Bradesco and XP analysts were among those who downgraded their recommendations on shares of Petroleo Brasileiro SA, as the Rio de Janeiro-based producer is known.
“A good reputation is hard to earn and easy to lose,” BTG bank analyst Thiago Duarte said in a note to clients.
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Morgan Stanley removed its ‘like’ recommendation on Brazil sovereign bonds on Monday, citing fiscal concerns and potential spillover from the removal of Castello Branco.
Petrobras’ “all-important” pricing policy and its implications for cash generation and planned asset sales, particularly of its refineries, has clouded its debt reduction and dividend outlook, Santander analysts led by Christian Audi said in a note to clients. They downgraded their recommendation on the stock to “hold” from “buy.”
Director-General Rodolfo Saboia of Brazil’s oil regulator ANP said that the CEO change would not affect the country’s policy of opening up the refinery sector to private investment or pursuit of free markets. He declined to comment directly on Petrobras’ refinery sales.
“The best way to attempt to reach a fair price is by opening the market ... and not depending on one actor to set the price a certain product should have,” he told Reuters in an interview.
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Petrobras shares plunged 22% on Monday, wiping out 71 billion reais ($13 billion) in market value, as Brazilian President Jair Bolsonaro again slammed its pricing policies after he replaced the state-controlled oil company's market-friendly CEO with a retired army general.
www.reuters.com