Cia. Siderurgica Nacional SA (SID:US), the second-largest Brazilian steelmaker by market value, rose the most in more than five years after the company said it will buy back as much as 10 percent of its freely traded shares.
CSN jumped 12 percent to close at 9.61 reais in Sao Paulo today, the biggest gain since Dec. 8, 2008. The stock, which traded at 3.1 times its three-month daily average volume, rose the most on the Brazilian benchmark Ibovespa index, which fell 1.1 percent.
The board of CSN, the worst performer of the 73 stocks in the Ibovespa this year through yesterday, approved the buyback of as many as 70.2 million shares, or 10 percent of the free float of the company, the steelmaker said in a regulatory filing late yesterday. The repurchase can take place from today until April 14, CSN said.
“A pledge to buy so many shares in such a short period of time will sure keep the stock rising for a while,” Joao Pedro Brugger, who helps oversee 400 million reais ($170 million) at Leme Investimentos Ltda., said in a phone interview from Florianopolis, Brazil. “The stock has performed poorly in the past few years, and now the company might be trying to signal that, in spite of that, it’s confident in the outlook for its business.”
Gerdau SA is Brazil’s largest steelmaker.
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