Fear of worse taxes drives Ibovespa to its lowest level in 3 months – Money Times

THE Ibovespa (IBOV) fell sharply on Monday, to the lowest closing level in three months, in a session marked by concerns about the country’s fiscal scenario, following an announcement by Renda Cidadã, a program that should replace the Family scholarship.

The Ibovespa fell 2.41% to 94,666.37 points, the lowest level since June 26, when it closed at 93,834.49 points. The financial volume of the session amounted to 27,440 million reais.

At the beginning of the session, the index followed the optimism of the international markets, rising more than 1.3% maximum. Soon, however, he lost strength. At worst, it fell 2.7%.

In the announcement of the Renta Ciudadana, Senator Marcio Bittar said that the program will be financed with funds from the Bolsa Família itself, surplus resources after the payment of precarious loans and with a portion of the funds from the Basic Education Maintenance and Development Fund (Fundeb).

The government leader in Chamber of DeputiesRicardo Barros (PP-PR), explained that the amount of the benefit to be paid will only be defined during the voting in Congress, depending on the approval of the proposals that will indicate the sources of this aid, in the case of precarious ones.

The announcement had a negative impact on the stock market, raising investors’ perception of risk.

For Étore Sánchez, chief economist at Ativa Investimentos, the Brazilian budget does not have fiscal space for Citizen Income and this Monday’s announcement reinforced this vision.

“In essence, the program has several fiscal problems, but the departures for its viability announced today ended up surprising because they are marginally worse than expected,” said Sánchez.

Highlight

Santander (SANB11) rose 2.1%. Bank of Brazil (BBAS3) gained 0.7%, but Itaú Unibanco (ITUB4) yielded 0.04% and Bradesco (BBDC4) fell 0.3%.

Jbs (JBSS3) fell 4.54%. Other companies in the sector followed suit.

Marfrig (MRFG3) lost 4.26%, while Minerva (MEAT3) depreciated 5%.

Embraer (EMBR3) increased by 3.9%.

The airline blue (BLUE4) reported Sunday that it received approval to operate the modified Embraer E195 jet for cargo functions.

Sew (CSAN3) decreased 2.9%, after announcing that it will request the cancellation of the registration application for the IPO of its subsidiary Compass Gás e Energia, citing “the deterioration of market conditions.”

Melnick (MELK3) lost 1.76% on its debut in B3 (B3SA3).

The construction company valued its IPO on Thursday at R $ 8.50 per share, raising R $ 713.6 million.