CCX Carvao da Colombia SA, the coal unit of Brazilian billionaire Eike Batista, slumped more than 10 percent today as investors flee pre-operational companies amid a worsening crisis in Europe.
Shares (CCXC3) of Rio de Janeiro-based CCX, which started trading May 25, dropped 9.1 percent to 5.40 reais at 2:04 p.m. in Sao Paulo after falling as much as 12 percent to its lowest level on record. A close at this level would mean the stock would have lost 37 percent in its first week of trading, more than doubling the 15 percent decline of the Brazilian benchmark Bovespa Index.
CCX, which plans to invest $5.5 billion to develop a coal mine, a railway and a port project in Colombia to begin production in 2017, was spun off from Batista’s power- generating unit MPX Energia SA (MPXE3) before the listing. Investors in Brazil are more reluctant to buy pre-operational companies amid a worsening scenario in Europe, Pedro Galdi, equity strategist at brokerage firm SLW Corretora in Sao Paulo, said.
“Eike Batista’s companies are still junior and they gained a speculative profile so when they gain, it is more than the index and the same when they fall,” he said in a telephone interview.
MPX declined 0.4 percent to 34.50 reais today to the lowest since May 24.
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