Friday, October 16, 2009

PBR, PetroBras, Now World's Fifth Largest Company

Bloomberg reports today that Brazilian oil producer PBR, Petrobras, became the world’s fifth-largest company by market value.

Petrobras’s market capitalization rose to USD$208B.

Rio de Janeiro-based Petrobras is shifting a great part of its operations to Sao Paulo after the major pre-salt discoveries off that states's coast. The company has surged 60% this year, the biggest gain among the world’s 10 largest companies. Its proven oil reserves may more than double in two to three years to as much as 35 billion barrels. The surge of Brazil’s currency is helping to boost the dollar value of Petrobras as foreign investors pour money into Latin America’s largest economy:

“You’ve got a Brazilian effect, an oil effect and on top of that you’ve got the amazing prospect of deepwater discoveries,” Bill Rudman, a money manager who helps oversee about $3 billion including Petrobras shares at Blackfriars Asset Management in London, said in an interview. “It’s a powerful combination.”

The market value of Petrobras has climbed above Berkshire Hathaway Inc., Procter & Gamble Co., International Business Machines Corp., Johnson & Johnson, BP Plc, General Electric Co., Royal Dutch Shell Plc, JPMorgan Chase & Co., BHP Billiton Ltd., Wal-Mart Stores Inc. and HSBC Holdings Plc this year, along with China Mobile and China Construction Bank.

PBR, however, is far from being the top performer in Brazil. That honor goes to GFA, a builder, which has soared 291% this tear, as we reported yesterday.

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