Vale shares rise as markets welcome CEO appointment
By Gabriel Araujo
SAO PAULO, Aug 27 (Reuters) -Shares of Vale VALE3.SA rose on Tuesday as analysts and investors welcomed the appointment of Gustavo Pimenta as the Brazilian miner's next CEO, starting next year.
Pimenta, Vale's head of finance, was unanimously picked by the company's board of directors to replace outgoing CEO Eduardo Bartolomeo, Vale said late on Monday, wrapping up a noisy succession process that had seen board members depart amid accusations of political influence.
Pimenta, 46, has served as Vale's CFO since 2021 after 12 years as an executive at U.S. energy company AES AES.N.
Analysts expect the decision to reduce uncertainty about the miner's strategy and remove an overhang on Vale's stock that has depressed its shares this year.
Sao Paulo-traded shares of Vale were up some 3% by midday, making it the top gainer on Brazil's benchmark stock index Bovespa .BVSP, which added 0.2%. Year-to-date, Vale was down 16%.
"Pimenta has built a solid reputation with investors and within the mining community," BTG Pactual analysts led by Leonardo Correa said, adding the announcement's timing was a surprise as they expected it to happen by December.
The process was "significantly accelerated as a means of de-risking the equity story, in our opinion," they added in a note to clients. "It is an important victory for Vale's governance and the country too."
Media reports this year said the Brazilian government was seeking to influence the CEO choice. President Luiz Inacio Lula da Silva has repeatedly criticized Vale for two deadly tailing-dam collapses.
Vale was privatized in the 1990s and has a dispersed ownership. But the government still exerts significant influence as its main shareholders include a pension fund operated by state-run lender Banco do Brasil BBAS3.SA.
Genial Investimentos analysts praised Pimenta's appointment as he is well-known within the sector and familiar with Vale's assets and expansion plans. Vale is one of the world's largest iron ore producers.
"It removes once and for all the prospect of the government being connected to the CEO position," Genial said. "The decision seems assertive. On the other hand, it also creates doubt as to who will replace Pimenta as CFO."
Reporting by Gabriel Araujo; Editing by Rod Nickel
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
