Study: Petchem sector Bovespa's least risky

Wednesday, September 26, 2007

The petrochemical sector is the least risky on São Paulo's stock exchange Bovespa, according to a study by consultancy Cyrnel International cited by newspaper Valor Econômico.

The risk potential is measured in relation to Brazil's benchmark Ibovespa index. "If an asset or an entire portfolio has an index of 2, it means that it offers double the risk of the Ibovespa," Cyrnel analyst Carlos Werneck was quoted as saying.

The petrochemical sector was defined as having an index of 1.36, the least risky on the Bovespa, according to the report.

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The reason is because the petrochemical industry has a history consolidation and attracts those that seek secure investments, Werneck said.

Also, petrochemical investments, production and demand are expected to be healthy in upcoming years, the report said.

"They are traditional sectors and are already consolidated, with large companies, present in the stock exchange for a long time and with a history of low volatility," Werneck said about both petchem and the finance sector, which has a risk index of 1.45.