See the stocks that most disappointed in 2021, according to a survey

Investors started 2021 with trepidation about what the impacts would be left by the coronavirus pandemic. However, the market did not expect inflation to take off and the Copom (Monetary Policy Committee) to raise the Selic rate to try to contain the IPCA (Extended Consumer Price Index).

The official inflation indicator in Brazil has already accumulated a double-digit increase in the last 12 months, while the basic interest rate, which started the year at 2%, rose to 9.25% at the last Copom meeting.

According to experts heard by CNN Brasil Business, inflation and Selic were responsible for placing Magazine Luiza, Via, Pão de Açúcar and Americanas as the worst shares of 2021.

And the prospects are that interest rates will remain high. In the last minutes of the Central Bank, the Committee foresees another adjustment of the same magnitude, that is, the interest rate at 10.75% for the beginning of next year.

“In other words, the retail and real estate development sector should still suffer in 2022”, says Eduardo Cavalheiro, economist and manager of Rio Verde Investimentos. “But it is worth saying that most of the impact in terms of share prices in these sectors must have occurred this year, due to the effect of anticipating expectations.”

See the survey carried out by Einar Rivero, from Economatica, on the stocks that had the worst performance in 2021.

Luiza and Via Magazine

Magazine Luiza and Via’s shares, as well as those of other retailers, have been following the national macroeconomic scenario: high level of inflation, rising interest rates and unemployment. All these factors impact the purchasing power of consumers, which reflects on companies in this sector.

Alexsandro Nishimura, economist, head of content and partner at BRA, an accredited firm of XP Investimentos, says that “competition has also intensified in the sector, which has helped to impact papers linked to e-commerce.” For example, Mercado Livre opened an exclusive logistics center for large items.

The balance sheets for the third quarter also highlighted the challenges to be faced by the sector, “already reflecting the macroeconomic deterioration”, highlighted the specialist.

Magazine Luiza recorded adjusted profit of R$22.6 million, almost 90% down on the R$215.9 million reported a year earlier. While Via, owner of Casas Bahia, had a net book loss of R$ 638 million in the third quarter.

Sugar Loaf

“The fall in Pão de Açúcar shares is explained by the split that brought Assaí to the stock exchange, which took place at the end of February,” says Nishimura.

The operation separated the multivarejo business (Pão de Açúcar) from the cash and carry business (Assaí), which previously were all combined under the same company.

However, the stock market price of a share does not only reflect the book value. “In the market’s pricing, Assaí’s assets built in an expectation of investors for each company and sector, which was not positive”, highlights the BRA partner.

American

Since the beginning of the year, Americanas shares have had a negative performance.

“We attribute the result mainly to a macro movement, as high-growth companies end up suffering more in times of volatility and macroeconomic uncertainties due to the increase in interest rates, combined with an increase in competition in the sector both among local companies and also (such as Shopee, Alibaba and Amazon),” XP retail analysts said.

Eztec

The actions of construction companies and developers are more sensitive to interest rates, as their effect goes beyond the classic inverse relationship of “rising interest, falling stock market”, says Nishimura.

“The effect of interest is amplified, as it acts directly on the businesses of companies, with the rise in interest rates making credit more expensive, which makes financing real estate more difficult.”