Bovespa Index Rises Most in Two Weeks on Brazil Growth Outlook
January 17, 2012, 2:41 AM ESTBy Ney Hayashi
Jan. 16 (Bloomberg) -- The Bovespa stock index jumped the most in two weeks as car-rental company Localiza Rent a Car SA led gains by stocks linked to domestic demand after a report showed Brazil’s economy expanded more than forecast in November.
Localiza, Latin America’s biggest car-rental company, rebounded from a seven-week low after a central bank report showed Brazil’s seasonally adjusted economic activity, a proxy for gross domestic product, rose in November at the fastest pace in 19 months. Oil company OGX Petroleo & Gas Participacoes SA contributed the most for the index’s advance as crude prices increased and after it announced an offshore discovery.
Brazil’s benchmark equity gauge added 1.4 percent to 59,956.46 at the close of trading in Sao Paulo, the biggest one- day advance since Jan. 3. Fifty-three stocks climbed on the index while 14 fell. The real was little changed at 1.7861 per U.S. dollar.
“The economic activity figures came in stronger than expected, which signals the economy is rebounding after a few weak months,” Gustavo Mendonca, who helps oversee 250 million reais ($140 million) as an economist at Oren Investimentos, said by phone from Rio de Janeiro.
Brazil’s seasonally adjusted economic activity rose 1.15 percent in November from October, the central bank said in a report published on its website today. The median forecast of 21 analysts surveyed by Bloomberg was for a 0.9 percent gain.
November’s data follow three straight months of falling economic activity, its longest contraction since the one that followed the bankruptcy of Lehman Brothers Holdings Inc. in 2008, according to the central bank.
Localiza rose 4.9 percent to 26.85 reais.
OGX Surges
OGX surged 5.8 percent to 14.98 reais, the most since Dec. 20. The oil company controlled by billionaire Eike Batista said it found hydrocarbons in two separate sections of a well it is drilling in shallow waters offshore Brazil, according to a regulatory filing today.
Oil climed from the lowest price in almost four weeks as Iran said that a disruption to crude supplies through the Strait of Hormuz would cause a shock to markets that “no country” could manage.
Petroleo Brasileiro SA, Brazil’s state-controlled oil company, added 2.6 percent to 23.65 reais.
BR Properties
BR Properties SA, a Brazilian property developer, jumped 5.4 percent to 18.42 reais, the biggest one-day advance since June 2010. The company agreed with WTorre Properties and Banco BTG Pactual SA to incorporate One Properties SA. The agreement comes in the last day of an extended memorandum of understanding between BR Properties and BTG Pactual, the bank controlled by Brazilian billionaire Andre Esteves, to merge real-estate assets, originally signed on Sept. 14.
The Bovespa has advanced 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. The gauge trades at 9.3 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.
Traders moved 4.42 billion reais 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.
--Editor: 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
