Petróleo Brasileiro (PBR) — generally abbreviated as “Petrobras” — shares fell off by over 11% after delivering a smaller-than-expected dividend to shareholders.Yahoo Finance Senior Enterprise Reporter Ines Ferré explains why markets have been so shocked by this determination, highlighting the interior pressures Petrobras faces from its board and challenges from Brazilian President Luiz Inacio Lula da Silva and his administration.For extra professional perception and the most recent market motion, click on right here to observe this full episode of Yahoo Finance Dwell.Editor’s be aware: This text was written by Luke Carberry Mogan.Video TranscriptJULIE HYMAN: One other inventory that we’re watching immediately. It is a ticker that doesn’t development on Yahoo Finance fairly often. We’re speaking about Petrobras, the Brazilian oil and fuel large.The corporate delivering smaller than anticipated dividend payout right here. A number of analysts have been speaking about $3 billion in money returned to traders. And now, the particular dividends usually are not being authorized. And traders not completely happy about it.JOSH LIPTON: Yeah, it appeared like there was Bloomberg piece on it saying the CEO abstained from the vote. They usually have been characterizing it as caught between the federal government, holding the federal government completely happy, which she apparently desires Petrobras to spice up funding. And alternatively, clearly strain from shareholders. That is the spot the CEO discovered himself in.JULIE HYMAN: Yeah, let’s usher in Ines Ferre for extra on this who tracks the oil and fuel trade. And it is a actually attention-grabbing story. As a result of, on the one hand, you’ve gotten privately held corporations which can be publicly traded across the globe that pay excessive dividends. After which you’ve gotten this firm that’s kind of it looks as if succumbing to authorities strain and isn’t going to be aggressive within the dividend area.INES FERRE: That is proper. That is Petrobras which is a state-owned firm. It’s a firm which is large in Brazil. And it is one of many actually massive corporations relating to oil and fuel on this planet.Story continuesIn reality, in Brazil, it is accountable for 73% of the manufacturing of oil and fuel in Brazil. And what they did was they actually shocked the markets by not handing out this extraordinary dividend that traders have been anticipating. And this actually spooked the markets.As a result of the board of administrators, it was stated that they voted in opposition to this. And people board of administrators, the members of the board of administrators have been appointed by the power minister and in addition by the administration, the Lula da Silva Administration, which is a leftist administration.And, in truth, reuters simply got here out with a bit saying that it was Lula da Silva himself that stated that dividend shouldn’t be doled out, and that he desires that cash to be invested for Petrobras to speculate that cash. This firm has a big funding plan over the following 5 years.They’re anticipating to speculate greater than $100 billion. 5 billion of that, by the way in which, going into renewable energies. They are saying that they’re an organization that’s in transition relating to into renewable power.However it actually goes to point out you this tug and pull between what Josh was alluding to, which is the administration, and the federal government, and politics, and an organization that desires to generate income, and is out to generate income additionally for its shareholders And its traders, that are investing on this firm as a result of they’re anticipating these kinds of dividends.JULIE HYMAN: Yeah, Ines, it is fairly attention-grabbing. And it looks as if there are some broader issues, not nearly Petrobras, however about different state-owned enterprises like this, too. Traders appear to be making an attempt to determine if there are implications there.INES FERRE: That is proper as a result of Lula da Silva, you may keep in mind that he has been reelected. And that is an administration that has been concerned in– look, in Latin America, total, you’ve gotten these kinds of corporations which can be these very a lot state managed in a manner corporations.And so for a time there, you noticed that after he was elected, you did not see a lot involvement, so to talk. However now, you might be seeing this. And so this has spooked the market.You noticed the Actual, the Brazilian forex that went down when this occurred as nicely. And that’s as a result of traders are involved that the federal government goes to meddle in. And they’ll use this cash to spend to speculate.JULIE HYMAN: We will see, ines. Thanks a lot. Respect it.