The amount exceeds the amount withdrawn in the whole of 2019, of R$ 44.5 billion. The exit speed is also a record and exceeds the 2008 daily average.
Until March 4, foreigners withdrew R$ 44.8 billion from the Stock Exchange in 2020. The amount exceeds the amount withdrawn in the entire year 2019, of R$ 44.5 billion, without counting share offerings (IPOs and follow-ons).
The withdrawal also exceeds and is B3's largest historical series since 2008. In values adjusted for inflation, R$ 44.6 billion were withdrawn in the year of the financial crisis. Exit speed is also a record, around R$ 1.05 billion per trading session.
Considering the initial offering of shares (IPOs) and subsequent offering of shares (follow-ons), the balance of foreigners is negative at R$ 33.4 billion this year. Considering these operations, in 2019 the output was R$ 4.7 billion.
Coronavirus and the impact on the economy
The reasons for foreigners to withdraw money from Brazil and other emerging markets are mainly due to the great fears of investors regarding the economic impact of the coronavirus. Furthermore, the slowdown in the global economy and delays in the progress of administrative and tax reforms.
The exit contributes to a higher dollar exchange rate. On Thursday (5), the American currency broke its new nominal record, reaching R$ 4.653. This Friday (6), the price drops 0.5%, to R$ 4.63 at around 1:10 pm. The Stock Exchange has its second consecutive session of sharp decline, with a drop of 3.8%, to 98,357 points, its lowest level since August 28, 2019.
Brazil's country risk measured by the five-year CDS (Credit Default Swap), a type of contract that works as a thermometer of investor confidence in relation to economies, rose by 10% to 142 points. It was the highest level since October 2019, before the Social Security reform was approved in the Senate.
Last Thursday (5), the Brazilian CDS rose 14.4%. It was the biggest daily percentage increase since the so-called Joesley Day, on May 18, 2017. On that day, information became public that Joesley Batista had recorded a conversation with then-president Michel Temer (MDB). At the time, country risk increased by 29%, to 265 points.
The CDS index rising is that investors are fearful for the country's financial future; if it falls, the message is the opposite: it signals that there has been increased confidence in the country's ability to pay off its debts.
