Braskem Falls as Brazil Said to Halt Import Tax: Sao Paulo Mover

Braskem SA, Latin America’s largest petrochemicals maker, slumped the most in a month after the Brazilian government was said to allow the expiration of an import tax that has helped to protect the domestic resin market.

Shares of the Sao Paulo-based company fell 2.6 percent to 17.13 reais at 12:21 p.m. in Sao Paulo, the biggest drop on a closing basis since July 5. The Ibovespa stock benchmark added 1.6 percent.

The tax suspension, which would also apply to raw materials such as steel, will be announced today to help Brazil to fight inflation, a government official with knowledge of the decision told Bloomberg News yesterday, asking not to be named because the plan wasn’t public yet.

“If confirmed, the measure will mean Braskem will face more competition in the domestic market, with negative effects on the company’s sales and prices” Felipe Rocha, an analyst at brokerage Omar Camargo, said by phone from Sao Paulo.

Consumer inflation in Brazil rose to 6.7 percent in June, according to the national bureau of statistics.

Braskem has gained 34 percent this year, as the Ibovespa slumped 20 percent.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

To contact the editor responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net

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