JBS stock falls 31pc, wiping 7.5b reais from its market value
SAO PAULO: Concern over insider trading accusations, an all-butdead initial public offering (IPO) and a looming deal with prosecutors helped fuel another rout that wiped about 7.5 billion reais (RM9.87 billion) from the market value of JBS SA, the Brazilian company at the centre of the country’s latest political scandal.
Shares of the world’s largest meatpacker plunged 31 per cent on Monday, the most on record.
That follows a 21 per cent slide last week when investors dumped Brazilian equities and the real after the first reports emerged of JBS’s owners admitting to paying bribes to President Michel Temer and other politicians.
The company’s bonds also dropped as Moody’s Investors Service cuts its credit rating.
The collapse in the stock price and speculation that JBS would face class-action suits in the United States as a result of the the revelations have killed plans for the IPO of its JBS Foods unit in New York, according to Luis Gustavo Pereira, an analyst at brokerage Guide Investimentos.
Also weighting on the shares is the uncertainty surrounding parent company J&F Investimentos SA, which is still in negotiations with prosecutors for a leniency deal.
Videoed court testimony released on May 19 showed Joesley Batista and brother Wesley, whose family controls JBS, describing a wide-ranging scheme of illicit payments over several years.
Temer, who has denied any wrongdoing, is fending off calls to resign.
Brazil’s securities regulator CVM has started five separate inquiries into trades related to JBS and Banco Original, which is also owned by J&F.
CVM informed prosecutors of the possible use of inside information in trading of dollar futures and shares. Bloomberg