Market expected a more independent-minded CEO for Petrobras

Economists in Rio de Janeiro heard by Agência Brasil agued that the market was disappointed by the nomination of Bando do Brasil President Aldemir Bendine as the new CEO of Brazil's state-controlled oil company Petrobras, following Graça Foster's resignation.

In the view of José Márcio Camargo, prefessor from the economy department at the Catholic University of Rio de Janeiro (PUC-RJ), “regardless of his competence,” the appointment shows that President Dilma Rousseff “wants to keep the company under control.”

According to Camargo, Bendine is very closely connected with the federal government. “It was a political nomination, regardless of his skills.”

He further stated that, as chief of Banco do Brasil, Bendine proved willing to follow the government's economic policy as opposed to attending to the specifict needs of the financial institution. “He rose the credit supply and pulled down interest at a moment when private banks were doing the exact opposite.”

Camargo went on to note that this is the reason why the market reacted so badly to the announcement, which made Petrobras shares plunge approximately 10% this afternoon on BM&Bovespa. He said that market agents expected someone with a more independent profile, “capable of bringing order to the confused situation in which the company finds itself.”

Economist Maurício Canêdo, from the Getúlio Vargas Foundation's (Ibre-FGV) Brazilian Institute of Economics, also  opposed the appointment. “It wasn't exactly what the market was expecting,” he pointed out.

Canêdo said that the expectation was that the new chief executive would be someone with a wider experience with companies. “The drop in Petrobras's shares reveals that the profile selected is different from what had been expected.”

He added that, for such a delicate moment in the firm's history. Aldemir Bendine was not the most eagerly expected choice by the market, in spite of not questioning his skills as a manager. Canêdo also highlighted Bendine's political link with the government. In his opinion, this could harm the autonomy in taking the necessary actions in behalf of the enterprise at such a moment of crisis as this.

Translated by Fabrício Ferreira