Vale SA (ADR) (NYSE:VALE) Reels In Political Uncertainty


Dallas, Texas 08/14/2014 (FINANCIALSTRENDS) – Vale SA (ADR) (NYSE:VALE), the Brazilian mining company was swept away in the uncertain political atmosphere in the country, as were other companies in this sector. The air plane crash of Presidential candidate Edurado Campos and his death has definitely plunged the country into turmoil. Badly affected oil and mining companies apart from VALE were Companhia Siderurgica Nacional (ADR) (NYSE:SID) and Gerdau SA (ADR) (NYSE:GGB), besides Oi SA (ADR) (NYSE:OIBR).

According to regional financial experts such as, Rogerio Freitas, a partner at hedge fund Teorica Investimentos, “Elections are the main driver for the market now, but without Campos, uncertainty increases.” As part of a telephonic interview, he suggested that, “The market will only find a direction once new polls become available.”

Other analysts too shared the same sentiment.

As Silvio Campos Neto, lead economist at Tendencies consultoria Integrada, the present market conditions are due to the cautioning and nervousness of different players.

With deep changes in the political scenario as erstwhile third position holder, Marina Silva, has now emerged as the favored candidate in Campos unfortunate demise.

Vale SA (ADR) (NYSE:VALE) will be affected by such changes, as will be other miners her analysts comment.

Tree Capital LLC, a New York based agency’s managing Partner, Luiz Carvalho, shared that,“ the lower classes,” would continue to support her candidature as before. He also shared that the political support for Dilma, in the second round “is likely to worsen.”

Vale SA (ADR) (NYSE:VALE) awaits strong political news to stabilize and recover on the stock markets. Other miners too are affected as the country’s miners have been under pressure from political leaders in complying with regulatory requirements and minimizing of mining activities. Political agenda of new president and the regulatory as well as price policies to be adopted will determine the future of players like VALE.

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