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Brazil official rules out fire sale of Banco do Brasil stock
October 1, 2014 / 9:09 PM / in 3 years

Brazil official rules out fire sale of Banco do Brasil stock

RIO DE JANEIRO, Oct 1 (Reuters) - Brazil’s government has no plans to sell the shares of state-run Banco do Brasil SA owned by the nation’s sovereign wealth fund, to help close a shortfall in the federal budget, a top finance ministry official said on Wednesday.

The government has no intention of carrying out a fire-sale of the shares which would “unnecessarily slash” their value, said Paulo Rogêrio Caffarelli, the ministry’s No. 2 official, at an event in Rio de Janeiro.

Local media recently reported that the sovereign wealth fund could put its stake in Banco do Brasil up for sale to help the government meet its main debt-reduction target for the year.

Shares of Brazil’s largest bank by assets shed 27 percent last month, partly on concern that any fire sale by the sovereign fund could unleash a glut of Banco do Brasil shares in the market.

As of mid-September, the sovereign fund’s stake in Banco do Brasil was worth about 3.9 billion reais ($1.6 billion).

The shares are up 10.8 percent this year.

The stock has fallen in three of the past five sessions on speculation that the fund’s sale of Banco do Brasil shares is imminent.

The stock rose 1.6 percent on Wednesday to 25.70 reais.

$1 = 2.4811 Brazilian reais Reporting by Rodrigo Viga Gaier; Writing and additional reporting by Guillermo Parra-Bernal Editing by W Simon

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