Brazilian miner Vale (NYSE: RIO) has seen its market value drop by 34% since May, when company shares on the São Paulo Bovespa Stock Exchange began declining, Brazilian daily O Globo reported.
In May, Vale was valued at 299bn reais (US$153bn) while on Friday (Sep 26) its market cap rang in at 198bn reais, O Globo said. Vale is the world's top iron ore producer with roughly 300Mt of output in 2007.
Vale's shares peaked at 59.22 reais during trading on May 19 and on Monday closed at 30.30 reais, including a 12% drop from closing at 33.72 reais the previous trading day.
For Antonio Carlos Goes, an analyst at Senso Corretora in Rio de Janeiro, the stock has been dropping because there is an excess of Vale shares being sold by foreign investors due to uncertainties in the US economy and its ripple effect around the world.
"All that has to happen [for further stock market declines] is for companies to start have problems exporting," said Goes. "There is a lot of uncertainty out there and there is not a company in Brazil that can withstand this crisis. People are afraid of risk."
Goes said even the US government's proposed US$700bn bailout package for investment banks - which the US lower house rejected on Monday - would not be enough to calm markets.
"In principle, the bailout package is not going to save America," Goes told BNamericas. "What the US really has to do is to resolve its real estate market problems."
