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Lower House Approves Amendments To Law Shielding State-Owned Enterprises

  • Brazil’s lower house approved amendments to the SOE law on Tuesday night, altering the quarantine period required for individuals who have participated in the electoral campaign before they join the management or the board of state-owned enterprises. The bill would cut the quarantine period from 36 months to 30 days.
  • The proposal, which still needs the backing of senators, allows Aloizio Mercadante, an economist from the leftist Workers’ Party who participated in Lula’s campaign, to head the country’s development bank BNDES, according to O Globo.
  • Analysts at BTG are noting it would remove one of the main mechanisms protecting state-controlled companies from political interference.
  • The unusually quick passage of the bill, which would also require signature by the president, is ‘indisputably negative’ for Petrobras, they added.
  • Separately, the state-owned oil producer was downgraded to neutral from outperform at Bradesco BBI on Tuesday ahead of an expected management transition under President-elect Luiz Inacio Lula da Silva.

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