Bloomberg News

Brazilian Stocks Advance as Usiminas, Vale Follows Metals Higher

January 12, 2012

Jan. 11 (Bloomberg) -- Brazilian stocks advanced for a fourth day as steelmaker Usinas Siderurgicas de Minas Gerais SA and mining company Vale SA gained after metals prices increased.

Usiminas, as Usinas Siderurgicas is known, jumped the most in two weeks. The stock led gains on the MSCI Brazil/Materials index, which was the best performer among ten industry groups. Homebuilder MRV Engenharia & Participacoes SA rose after a measure of prices in Brazil unexpectedly dropped, boosting the outlook for stocks linked to domestic demand. Consumer-goods maker Hypermarcas SA plunged after Banco BTG Pactual SA said it doesn’t plan to make a hostile bid for a stake in the company.

The Bovespa index climbed 0.3 percent to 59,962.40 at the close of trading in Sao Paulo. Thirty-four stocks rose on the gauge, while 33 sank. The real weakened 0.2 percent to 1.8025 per U.S. dollar.

“After two terrible years, many stocks started 2012 looking cheap,” Osmar Cesar Camilo, an analyst at Sao Paulo- based brokerage Socopa Corretora Paulista, said by phone. “Brazilian companies should keep profiting this year, even as the economy slows a bit, so maybe last year’s drop was a bit excessive.”

The Bovespa trades at 9.4 times analysts’ earnings estimates, which compares with the ratio of 9.6 for MSCI Inc.’s measure of 21 developing nations’ equities, data compiled by Bloomberg show. Brazil’s benchmark equity gauge sank 18 percent in 2011.

Industrial metals advanced, with the Bloomberg Base Metals 3-Month Price Commodity Index climbing 0.7 percent, on speculation China may loosen monetary policy to shore up growth, boosting the outlook for demand.

Vale rose 0.8 percent to 39.81 reais. Usiminas gained 3.1 percent to 17.83 reais.

IGP-M Price Index

MRV, Brazil’s fifth-biggest homebuilder by revenue, rose 2.2 percent to 12.79 reais, the best performer on the MSCI Brazil/Consumer Discretionary Index.

The first preview of Brazil’s IGP-M index of wholesale, construction and consumer prices showed prices declined 0.01 this month, the Getulio Vargas Foundation said on its website today. That compares to a median estimate for a 0.10 percent increase in a Bloomberg survey of 13 economists.

Hypermarcas fell 1.7 percent to 10.50 reais after earlier plunging as much as 6.8 percent. BTG Pactual said in a regulatory filing today neither the bank nor any of the funds it manages hold a stake of more than 5 percent in the company.

Hypermarcas rose 26 percent this year through yesterday on speculation BTG Pactual, the Brazilian owned by billionaire Andre Esteves, was in talks to join its controlling block.

Oil Drops

Brazil’s benchmark equity gauge earlier fell as much as 0.6 percent as lower commodities prices dimmed the outlook for Brazilian producers. Petroleo Brasileiro SA, Brazil’s state- controlled oil company, was little changed at 22.91 reais after earlier sinking as much as 1.1 percent.

The Bovespa has gained 23 percent from a two-year low on Aug. 8 as interest-rate cuts in Brazil and signs of progress in solving Europe’s debt crisis buoyed demand for equities.

Traders moved 5.59 billion reais ($3.10 billion) in stocks in Sao Paulo today, data compiled by Bloomberg show. That compares with a daily average of 6.49 billion reais in 2011, according to data from the exchange.

--Editors: Richard Richtmyer, Marie-France Han

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos in New York at papadopoulos@bloomberg.net


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