Brazilian Retailer Shares Fall, Pressured by Latest IOF Changes

Brazilian retailers including Azzas 2154 SA and Magazine Luiza SAunderperformed the broader Ibovespa stock index Friday on concern that an increase in a tax known as IOF on certain operations will make credit more expensive.

• Azzas fell 6.1%; Magazine Luiza retreated 5%
• The retail sector is sensitive to increases in the cost of credit and changes in the taxation of supply-chain financing operations known as “forfait” or “risco sacado” in Portuguese, after the government announced measures to increase the IOF tax
  • “The retail sector, which is already facing the challenge of rising inflation, will experience an increase in the ...