Exit of foreign capital from Brazil leaves the country at the forefront of global markets

A Brazilian Stock Exchange (B3) lost around R$21.2 billion in foreign capital in 2024. From January to the end of March, Ibovespa accumulated a 4.53% drop in this financial contribution — the worst index, in a survey of more than 30 countries. The data is from Elos Ayto Consultoria, in partnership with the Investing.com platform.

The global financial market had to adapt to the drop in interest rates in the United States, as the North American rate is the main reference for investors to choose the destination of their investments. Even with the variables, many countries managed to attract the attention of financial institutions to the local economy.

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The Indian Stock Exchange, Nifty 50, has achieved a 2.74% increase in foreign inflow since the beginning of the year. Russia, which has been at war with Ukraine since 2022, managed to present a 6.75% increase for Moex in the same period. The European market, Stoxx 500, rose 10%. The leader of the survey was BIST100, from Turkey, with a valuation of 21.55% in 2024.

Brazil, in turn, was unable to keep pace with the international market. Not only was it left behind, it followed a completely opposite path. The negative result for the Brazilian market is due to the instability and interference of the Luiz Inácio Lula da Silva government in state and private companies, such as Petrobras and Vale.

In the case of Petrobras, the federal government has been pressuring the board of directors to withhold the distribution of dividends to its shareholders. On March 8, the friction caused the oil company to lose R$55 billion in one day.

Dividends are portions of a company’s profit given to people who invested in the company.

The large loss of the state-owned company and the federal interference in Petrobras’ board led the opposition to call the Senate’s Economic Affairs Committee (CAE), which approved an invitation to the president of Petrobras, Jean Paul Prates, to explain the alleged government interference in Petrobras. company.

In the case of Vale, privatized 27 years ago, the Lula government contributed to the sudden change of president of the mining company. The company’s board decided to end the term of current president, Eduardo Bartolomeo, until the end of 2024. The action caused one of the members to announce his departure, alleging political interference and manipulation in the process.

Read also: “Only 34% of Brazilians are satisfied with the country’s economy”

Gabriel de Souza is an intern at Magazine West in Sao Paulo. Under the supervision of Edilson Salgueiro