Could Petrobras Deal Spark Brazilian Stock Rally?
Thomson Reuters quantitative analyst Mike Tarsala has an interesting piece out today on the potential impact of the Petrobras (NYSE: PBR) deal on the Brazilian Bovespa stock index. The Brazilian oil giant is attempting to raise as much as $75 billion in what has become the largest stock offering in history. The proceeds will be used to fund the company’s $224 billion investment program over the next five years. Tarsala believes that even a lukewarm Petrobras (PBR) offering may give the Bovespa stock index a lift in the coming weeks. Investors have been anticipating this dilutive deal for some time now, and as a result PBR has been a weight on the Bovespa. Petrobras is the second largest company on the 68-member Bovespa behind mining giant Vale (NYSE: VALE). It accounts for 9.9% of the index’s weight. Combine that with the fact that PBR is the fourth worst performing stock on the Bovespa year-to-date, and it is not hard to imagine a case where even a moderate turnaround in PBR as a resu
