Stock market fell 9% and lost BRL 546 billion in market value since Lula’s election

Companies listed on B3, the Brazilian stock exchange, have lost R$546.2 billion in market value since the end of the elections, when Luiz Inácio Lula da Silva was confirmed as the new president-elect, on October 30.

The value of the drop is equivalent to 3.8 times the value of the PEC of the Explosion: the proposed amendment to the Constitution presented by Lula before taking office and approved by Congress in December released an extra budget of R$ 145 billion so that the new government could spend on Bolsa Família and other social programs in 2023.

The accounts take into account the sum of all more than 400 publicly traded companies on B3 and was calculated by the TradeMap investment platform at the request of CNN .

On October 28, the last Friday before the second round, on a Sunday, all these companies together were worth R$4.377 trillion. In the trading session this Tuesday (3), this value had fallen to R$ 3.831 trillion.

In the same period, the Ibovespa, the index that includes the most traded companies on the stock exchange, accumulated a drop of 9.1%.

“It is the investor who loses, since the drop in market value is, in fact, how much the equity of those who invested in those companies has reduced”, says the commercial head of TradeMap, Einar Rivero.

In the trading session on Monday (2), the first of 2023 and also the first after Lula’s inauguration, on Sunday the day before, the Ibovespa had already sunk 3% and the dollar had risen 1.5% after the president returned to criticism of the spending cap and announcing the repeal of a series of privatizations in his opening speech.

Among his first measures, Lula signed an order on Sunday determining the withdrawal of eight state-owned companies from the privatization plan left by the previous government, including Petrobras and Correios.

This Tuesday, the Ibovespa dropped more than 2% again, returning to the level of 104 thousand points. The dollar rose another 1.8% and closed at R$5.45, the highest value in five months.