Bloomberg News

Bovespa-Index Futures Drop as Brazil GDP Growth Misses Forecasts

March 01, 2013

Bovespa stock-index futures fell after a report showed Brazil’s economy expanded in the fourth quarter at a slower pace than forecast, adding to concern faltering growth may sap corporate earnings.

Multiplus SA (MPLU3), the frequent-flier unit of Latam Airlines Group SA’s Brazil business, may move after reporting fourth- quarter profit that trailed forecasts. Insurer Sul America SA may be active after saying it plans to buy back as much as 3 percent of the public float of its units in the next 12 months.

Bovespa-index futures tumbled 1 percent to 57,070 at 9:05 a.m. in Sao Paulo. The real weakened 0.3 percent to 1.9843 per dollar. Brazil’s gross domestic product grew 0.6 percent in the fourth quarter from the previous three-month period, the Rio de Janeiro-based national statistics agency said today. Economists surveyed by Bloomberg had forecast an expansion of 0.8 percent.

Eighteen of 28 companies on the Bovespa (IBOV) index that have already reported fourth-quarter earnings missed analysts’ forecasts, according to data compiled by Bloomberg.

The Bovespa has dropped 9.3 percent from this year’s high on Jan. 3 amid concern accelerating inflation may curb Brazil’s economic recovery and the government’s interventionist policies will hurt profits in industries including utilities and energy. The MSCI BRIC Index (MXBRIC) of shares in Brazil, Russia, India and China has slid 4.3 percent over the same period.

Brazil’s benchmark equity gauge trades at 11.7 times analysts’ earnings estimates for the next four quarters, compared with 10.5 for the MSCI Emerging Markets Index (MXEF) of 21 developing nations’ equities, data compiled by Bloomberg show.

Trading volume for stocks in Sao Paulo was 8.72 billion reais yesterday, which compares with a daily average of 7.53 billion reais this year through Feb. 26, according to data compiled by the exchange.

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 at papadopoulos@bloomberg.net


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