Balance sheet season: Vale, Gafisa, IPOs and factors affecting Brazilian stock market today (July 20)

RIO DE JANEIRO, BRAZIL – The main stock markets are up on Tuesday, July 20, recovering from the losses at the beginning of the week caused by concerns about the economic effects of the Delta variant of the coronavirus.

More contagious, the Delta variant has caused the number of cases to rise even in countries with high vaccination rates, and prompted the return of measures to contain the spread of the virus. Yesterday (19), the Dow Jones index had its worst performance since October, falling 2.09%.

This morning, the American index is up about 0.40% in the futures market, as are the S&P 500 and the Nasdaq. In Brazil, the Ibovespa fell 1.24%, and the dollar rose more than 2% yesterday, reflecting international trends.

In Europe, where the stock markets open early, the Stoxx 600 index rises about 0.5%. In Germany, the DAX rises 0.3%, having on the radar the country’s producer price index, which reached an accumulated 8.5% in 12 months against expectations of 8.4%.

In the United States, the main economic indicator will be the June building permits, for which 1.7 million permits are expected versus 1.683 million in the previous month.

Balance sheet season

In Brazil, the second quarter balance sheet season starts today, with the release of the results of Neoenergia (NEOE3) and Romi (ROMI3) after the closing of the trading session.

With one of the best performances among small companies, Romi’s shares accumulate a 100% increase in the period of a year. Neoenergia’s shares fell about 17% in the same period.

The next company to release results will be Hypera (HYPE3), but only on Friday, 23. The balance sheet season will only really heat up next week, when more than 30 announcements are expected, among them, Vale (VALE3) and Ambev (ABEV3).

VALE

An outline of what to expect for Vale’s balance sheet was already presented last night in its second-quarter production report. In the period, the mining company recorded a 23% increase in iron ore sales year on year, with the production level hitting 75.7 million tons, almost in line with market expectations of 78 million tons. In New York, Vale ADRs are up about 0.7%.

GAFISA

Gafisa (GFSA3) announced that it intends to make a follow-on stock offering of up to R$300.5 million. The value of the issue has already been fixed at 4.59 reais and took into account the price of the paper in the last 30 trading sessions.

At least R$44.7 million of this amount should be used for debenture holders to subscribe to the shares. The rest, according to the company, should be destined to Gafisa Propriedades projects.

IPOs

Tuesday expects the pricing of initial public offerings (IPOs) of Multilaser and Privalia. The Multilaser IPO was scheduled for last week, but the company was advised by the CVM to postpone the offering due to changes in balance sheet figures.

With an indicative range between R$10.30 and R$13 per share, the offer should move around R$2 billion, considering the center of the range.

Privalia, on the other hand, has an indicative range between R$16.30 and R$18.10 and may raise R$750 million in its offer, also considering the center of the range.

DESKTOP

Desktop, a broadband services company, priced its offer yesterday at R$23.50 per share, close to the floor of its indicative range, which was between R$23 and R$28. The shares will debut at the B3 stock exchange this Wednesday, 21, under the ticker DESK3