Aug. 1 (Bloomberg) -- Braskem SA, Latin America’s largest petrochemicals maker, slumped the most in three weeks after the Brazilian government allowed the expiration of an import tax that has helped to protect the domestic resin market.
Shares of the Sao Paulo-based company fell 2 percent to 17.22 reais at the close of trading in Sao Paulo, the biggest drop since July 8. The Ibovespa stock benchmark added 1.9 percent.
The government will cut import tariffs on basic materials from steel to textiles to improve competitiveness and help ease inflation, Finance Minister Guido Mantega told reporters today in Brasilia. Brazil’s consumer prices rose 6.7 percent in June, exceeding the 6.5 percent upper limit of the central bank’s inflation target.
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.
Braskem has gained 35 percent this year, as the Ibovespa slumped 19 percent.
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