News about Lula da Silva

Brazilian stocks plunged after Luiz Inácio Lula da Silva held on to victory in the presidential election, against expectations of a win for business-friendly candidate Flavio Balsonaro; the iShares MSCI Brazil ETF (EWZ) fell 19.8% on Monday and MercadoLibre (MELI) dropped 7.8%. The author argues Lula's policies would essentially maintain the status quo, and that MercadoLibre's weaker stock performance over the past few years stems mainly from competition from Amazon and Shopee and falling profit margins as it invests. Second-quarter revenue rose 50% to $10.2 billion, and the company became the first to record 30 straight quarters of 30%-plus revenue growth. The author sees the stock trading at a discount, with a forward P/E of around 30, and notes that analysts expect margins to expand again next year.

Nu Holdings shares fell 16.95% on Monday, in line with other Brazilian equities, as investors reacted to Sunday's presidential runoff rather than to company news. Leftist incumbent Luiz Inácio Lula da Silva won and will govern for another four years, and investors worry he will continue direct intervention in strategic enterprises amid a struggling economy and a depreciating Brazilian real. The author says the main risks for Nu are Brazilian consumer strength, borrowers, interest rates and economic development rather than direct intervention, and that Monday's sell-off looks like an unsustainable panic reaction. He argues Nu has grown large enough to weather a slump.

Petrobras ADRs (PBR) fell 16.63% and PBRA 18.27% on Monday, joining a rout in Brazilian stocks after President Luiz Inácio Lula da Silva beat conservative challenger Flávio Bolsonaro 51.8% to 48.2% in the runoff, a result that surprised investors who had expected a Bolsonaro win. Bolsonaro is refusing to concede and alleges the administration suppressed votes in key districts, while nearly all other Latin American leaders have congratulated Lula, with only Argentine President Javier Milei holding back. The article notes that since 2023 Lula has placed government control at the center of energy policy, imposing price controls on domestic fuel sales, ending privatization of Petrobras's assets, and ordering the company to expand production and favor capital investment over dividends. These moves may look negative in the short term but could pay off over the longer term, and Petrobras shares trade at 6.6x trailing earnings.