The were proposed for delisting from S&P due to the persistent low stock price. The company is apparently contesting the decision.
Yeah man. I hear you. CEMIG's stake in Belo Monte was never a good thing since that project was always destined to lose money. I had assumed most of that was water under the bridge though.
A couple of things that turned me off recently:
1. The story behind their position in Santo Antonio Dam - "Relação entre Cemig e Andrade Gutierrez chama atenção da Lava Jato"
2. The analysis presented in "CEMIG Still Under Substantial Pressure" which is now a PRO article.
BBD and ITUB are really sterling companies. Having said that I sold my holdings in both as well for the macro-economic and political factors which continue to plague Brazil.
I didn't mean to imply that they would be deslisted also, though I suppose that is a remote possibility. Although it gets much less press, EBR is at the heart of the Lava Jato scandal and auditors refused to sign off on their 20-F because they did not account for the corruption impact.
This is having the two-fold effect of dragging down the entire Brazilian electric sector and causing (somewhat unjustified) fears regarding CIG's balance sheets. Another thing I discovered about CIG recently that I didn't like is that they were essentially forced to take on unprofitable contracts to bail out Andre Gutierrez's bad investments. ELP has always been better at reducing its exposure to such shady deals.
This news is compounding the bearish effect of the crashing BVSP and commodities.
For those who don't know Eletrobras (EBR) was delisted by the NYSE yesterday for failing to file their 20-F and fell 20% yesterday. The Brazil government also indicated they think EBR will need a cash injection. CEMIG stated they are delaying their filing because of investigations related to their Belo Monte holdings. Markets hate uncertainty.
Fortunately, I sold all my Brazilian holdings at a miniscule gain before May crept in for seasonality reasons and because there is too much uncertainty surrounding the Temer transitiion. I'm taking the summer off.
How's your Portuguese? Try to be a bit more civil in your responses.
Try searching and translating these.
S&P rebaixa rating da Gafisa e mantém perspectiva negativa
Devoluções derrubam resultados da Gafisa
No fim do dia, a agência S&P rebaixou a nota de crédito da Gafisa para transações nacionais de brBBB para brBB. Em nota, a agência destacou o impacto da recessão do País no setor imobiliário
R$50 million loss reported on 1Q earnings Friday pushed by more .cancelled sales in the middle class housing market (Tenda offered some counterbalance to the losses).
S&P lowered their rating last week as well.