Petrobras Hits $100B Market Value as Bolsonaro Rises in Polls Ahead of Brazil Runoff

The state oil company’s stock’s strong rise on Friday was fueled by perception of the possible reelection of incumbent candidate Jair Bolsonaro

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Bloomberg Línea — Brazilian energy giant Petrobras’ (PETR4) preferred shares rose 5.3% on the Brazilian stock market on Friday, to 38.39 reais ($7.43) — the highest intraday hike in value since December 2009.

The strong bullish move was fueled by the perception of the possible re-election of Jair Bolsonaro on October 30, after the incumbent candidate narrowed his gap with former president Luiz Inácio Lula da Silva in the opinion polls.

A Modalmais survey released earlier in the day gave Bolsonaro 46.9% of voting intentions, against 45.9% for the leftist leader.

PETR4 shares ended Friday’s trading session up 3.43%, trading at 37.72 ($7.31). The jump pushed the company’s market value over $100 billion. This week, the preferred shares of the oil company have climbed 12.9%.

Welliam Wang, head of equities at AZ Quest, told Bloomberg News in an interview that the chance of privatizing Petrobras is greater with Bolsonaro, which explains the stock’s rise on Friday.

Victor Paganini, an analyst at Quantzed, also tied the rise in Petrobras shares to Bolsonaro’s lead in the polls.

“The political landscape showing Bolsonaro as a potential winner in the runoff produced a very strong buying momentum among those focusing on state-owned companies, given that privatization is part of Bolsonaro’s plan. The market understands that it would be attractive to privatize these companies,” he said.

Another contributing factor to the appreciation of the company’s shares was the high oil prices this week. On Friday, Brent crude climbed 1.21% to $93.50 per barrel. During the week, the gain has totaled 2.04%.

Petrobras releases its Q3 production report on October 24 and its financial statement on November 3, both after the market closes.

-- With information from Bloomberg News