Sept. 18 (Bloomberg) -- Brazil’s Bovespa index climbed to a 14-month high, capping the best weekly advance since July, on speculation an improving domestic economy will bolster profits for retailers, homebuilders and technology companies.

Lojas Americanas SA and Rossi Residencial SA gained at least 1 percent after a Valor Economico report that central bank president Henrique Meirelles said companies should invest to prepare for economic growth. Positivo Informatica SA jumped to a 15-month high as Itau Unibanco Holding SA said Brazil’s largest computer maker may report “strong” third-quarter results. OGX Petroleo e Gas Participacoes SA capped an 11 percent weekly gain after Itau analysts said the oil company is awaiting regulatory approval for a proposed merger and acquisition deal.

“There’s been a succession of good news about the economy this week,” said Guilherme Sand, who helps manage about $350 million at Solidus Brokerage in Porto Alegre, Brazil. “As people wait for dips more people keep entering the market. It has a lot to do with low rates here and abroad.”

The Bovespa rose 0.8 percent to 60,703.01, the highest level since July 21, 2008. Two stocks gained for each that fell on the index. The BM&FBovespa Small Cap index added 0.4 percent to 968.93, extending a gain for the week to 2.4 percent. Mexico’s Bolsa fell 0.3 percent, while the Lima General Index rose 1.2 percent. Chilean markets were closed for a holiday.

The Bovespa climbed 4 percent this week, extending its gain this year to 62 percent, amid signs Brazil’s economy is rebounding after its first recession since 2003. Domestic auto sales may climb to a record this year, Meirelles said yesterday. Another report this week showed the economy created jobs in August at the fastest pace in 11 months.

‘Evidence of Growth’

Companies that delay investment, waiting for more “evidence of growth,” may lose market share just as private banks did to state-controlled lenders, Meirelles said in an interview with Sao Paulo-based Valor. The central bank president expects the world economy to have a “V-shaped recovery,” Valor reported Meirelles as saying.

Lojas Americanas, Brazil’s biggest discount retailer, added 1 percent to 11.46 reais. Rossi, a Sao Paulo-based homebuilder, jumped 2.6 percent to 13.65 reais.

Positivo climbed 1.8 percent to 16.09 reais. The stock was upgraded to “outperform” from “sector perform” at Itau, which cited “positive operating momentum” and prospects for growth in Brazil’s computer market.

Batista Companies

OGX added 3.4 percent to 1,219.95 reais. The company controlled by billionaire Eike Batista is awaiting approval for an acquisition deal in Brazil and is in talks overseas on another transaction, Itau analysts said in a report. Brazil’s national petroleum agency, known as ANP, needs to give the go- ahead for the deal inside Brazil, Itau said.

“There is one deal already signed and waiting for ANP’s approval, and OGX is working on another three, one of which is outside of Brazil,” Sao Paulo-based Itau, Brazil’s largest non- government bank, wrote in the report. “M&A activity is pretty heated.”

MMX Mineracao e Metalicos SA gained 2.2 percent to 9.64 reais. Batista plans to sell a minority stake in MMX to Wuhan Iron & Steel Co. by November, Valor said yesterday, citing an interview. EBX Brasil SA, Batista’s holding company, has $9.2 billion cash, and Brazil’s state development bank, known as BNDES, and China Development Bank Corp. may provide some funds, Valor said. The spending will include $2.5 billion to explore for oil in the next two years, according to the newspaper.

LLX Logistica SA, Batista’s shipping and logistics company, jumped 5 percent to 6.09 reais. MPX Energia SA, the electric utility controlled by Batista, rose 2.8 percent.

Cia. de Concessoes Rodoviarias fell 1.8 percent to 30.91 reais after saying it may sell 1 billion reais ($552 million) in shares. The offer from Brazil’s largest toll operator may include a supplementary sale of up to 35 percent of the initial sale, in two separate offers of 15 percent and 20 percent, based on demand, a regulatory filing said.

Mexico Stocks

The Bolsa’s retreat pared a weekly gain to 1.7 percent.

Corporacion Geo SAB, Mexico’s second-largest homebuilder, fell 0.3 percent to 35.01 pesos. The company sold $250 million of five-year bonds in overseas markets. The bonds yield 659.6 basis points more than U.S. Treasuries, according to Bloomberg data.

Banks rose after the central bank maintained its benchmark rate at 4.5 percent for a second month on an improved economic outlook for Mexico and the U.S., its largest trading partner.

Grupo Financiero Banorte SAB, Mexico’s largest publicly traded lender, added 3.8 percent to 42.56 pesos. Grupo Financiero Inbursa, the bank controlled by billionaire Carlos Slim, increased 1 percent to 39.89 pesos.

To contact the reporter on this story: Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net; Emily Schmall at eschmall@bloomberg.net.

Last Updated: September 18, 2009 17:13 EDT