Petrobras Surges to Four-Month High on Earnings Report Outlook

Petrobras Surges to Four-Month High on Earnings Report Outlook

2:00 PM BRT
April 13, 2015

Petroleo Brasileiro SA jumped to the highest level since December, extending a three-day rally on speculation the oil producer will release long-delayed earnings and is making progress on asset sales designed to raise cash.

Petrobras, as the company is known, climbed 6.4 percent to 12.58 reais at 1:50 p.m. in Sao Paulo, leading gains on the benchmark Ibovespa gauge. The shares have surged 19 percent in the past three sessions, compared with an advance of 1.7 percent for the index.

Investors are speculating a five-month wait for the company’s financial results will end after Folha de S.Paulo reported Friday that the results might be published April 17, ahead of an end-of-the-month deadline to meet rules on its bonds. The rally also comes amid reports of divestments, as Agencia Estado said Petrobras wants to sell a stake in petrochemicals maker Braskem SA. On Friday, six people with knowledge of the matter said Petrobras is considering selling fields in its fastest-growing deepwater oil region.

“There was a lot of concern the company wouldn’t meet the deadline to deliver results, and now it seems they will,” Otavio Vieira, a partner at hedge fund Fides Asset Management, said by telephone from Rio de Janeiro. “There’s a lot of rumors. They’ll probably have to sell assets. But until we know how that will happen, it’s hard to be optimistic.”

Investors could be buying shares to cover short positions in Petrobras, Vieira said. Short interest on the company’s American depositary receipts, essentially bets that the stock will fall, reached a record high last week.

Under new Chief Executive Officer Aldemir Bendine, who took over in February, Petrobras announced plans to sell $13.7 billion in assets this year and next to reduce debt and fund investments.

The company didn’t immediately provide comment on the Braskem report when contacted by e-mail.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: