Brazilian lawmakers to investigate suspicious behavior around Petrobras stock

Last week, the federal government’s decision to breach Brazil’s federal spending cap — one of the country’s most effective austerity controls — spooked investors and led to some of the São Paulo stock exchange’s worst performances in 2021. But benchmark indexes roared back on Monday, also as a result of government action. Shares of oil giant Petrobras jumped almost 7 percent after President Jair Bolsonaro suggested its privatization was “on the government’s radar,” a statement later endorsed by Economy Minister Paulo Guedes.

Talk of handing Petrobras over to the private sector is little more than a pipe dream, rehashed each time the government faces pressure over rising fuel prices. Even if President Jair Bolsonaro was serious about privatizing Brazil’s biggest company, the process would take several months in the best of cases. Yet, simply mentioning the ‘p’ word was enough to drive Petrobras shares up.

People who bought Petrobras stock prior to Messrs. Guedes and Bolsonaro’s words made hefty gains, especially those who went for stock options — riskier investments which give you the right to buy or sell a stock at a pre-set price and date. Betting on Petrobras a few days ago was not an obvious choice — at the closing bell on Friday, the company’s preferred stock was down 6 percent in the year.

But there were investors who chose to buy Petrobras...