Copasa shares jump as tariff methodology is unveiled

Published September 8th, 2016

Shares in Brazilian water concessionaire Copasa climbed to their highest level in nearly two years after Arsae – the regulator in its home state of Minas Gerais – revealed the methodology for the company’s forthcoming tariff review.

The granting by Arsae of a 13.9% extraordinary tariff increase back in April was a much-needed shot in the arm for Copasa in the wake of the financial pressures brought about as a result of local water shortages. This week’s unveiling of the timeline and methodology for the second part of the tariff review increases the level of clarity for investors.

“Despite the lack of specific numbers, […] the announcement per se is a clear positive, as it shows real progress in this process whilst reducing the risk of any postponement,” wrote BTG Pactual analyst João Pimentel in a note to clients.

The initial public hearing relating to the tariff methodology ends on 14 October.