Sept. 17 (Bloomberg) -- Brazilian stocks fell for the first time in four days as Itau Unibanco Holding SA recommended investors become more “defensive,” overshadowing rallies in Redecard SA and Banco do Brasil SA.

Cyrela Brazil Realty SA Empreendimentos & Participacoes and Gafisa SA led declines among real estate developers after Itau strategists said equity offerings in the industry will limit the market’s gains. ALL America Latina Logistica SA fell the most in the Bovespa index on concern a sale of convertible bonds will dilute shareholder value. Redecard jumped to a one-month high on speculation the government may compromise on new regulations for the card-payment industry.

The Bovespa fell 0.3 percent to 60,236.03 after closing yesterday at above 60,000 for the first time since July 2008. The BM&FBovespa Small Cap Index slipped 0.8 percent. Mexico’s Bolsa index rose 1.3 percent, while Chile’s Ipsa index added 0.7 percent. The MSCI Emerging Markets Index gained 0.6 percent.

“In June almost the whole market was projecting the Bovespa would be close to 60,000 at the end of the year, and here we are in September already passing 60,000,” said Reinaldo Zakalski, who manages $240 million at BI Invest in Sao Paulo. “I don’t see big problems ahead, but from here on out there isn’t much room for gains.”

The Bovespa has rallied 60 percent this year on speculation rising commodity prices and record-low interest rates will boost growth in Latin America’s largest economy. The measure, which fell a record 41 percent in 2008, has more than doubled from its Oct. 27 low last year.

Share Sales

Brazilian companies are lining up to sell stock after this year’s rally. At least 12 companies filed to sell equity since July 31, including Gol Linhas Aereas Inteligentes SA, the nation’s second-biggest airline, and Rossi Residencial SA, the sixth-largest homebuilder.

“We are assuming a slightly more defensive stance on our portfolio, reducing beta and increasing exposure to the utilities sector,” Itau strategist Carlos Constantini wrote in a note to clients today. “The growing number of equity offerings may cap the market’s performance in the short term.”

The strategist recommended “taking profits” on Gafisa, Brazil’s second-biggest homebuilder.

Gafisa retreated 1.8 percent to 29 reais. Rossi fell 2.2 percent to 13.30 reais. Cyrela lost 3.4 percent to 24 reais.

ALL Bond Offering

ALL dropped 4.1 percent to 12.97 reais. Latin America’s largest railroad operator plans to sell 1.3 billion reais ($717 million) of 3-year bonds in a private placement, the company said in a regulatory filing yesterday. The bonds can be converted into units, representing four preferred shares and 1 common share, or into common stock, the filing said.

“We think an overhang to shares could be created in the short term, since the use of proceeds from the offering are still unknown and it indicates a possible larger equity offering in the medium term,” Bank of America Corp. analyst Sara Delfim wrote in a note.

Redecard, the processor of Mastercard Inc. payments, rose 3.9 percent to 27.44 reais. Bigger rival Cia. Brasileira de Meios de Pagamento gained 4.7 percent to 17.69 reais.

The regulatory agency, Cade, yesterday voted unanimously to overturn a Justice Ministry ban on the exclusive right of VisaNet, as the company is known, to accredit businesses in Brazil to accept cards carrying the Visa logo. The Barueri-based company’s monopoly will end in June 2010, according to a June prospectus for its initial public offering.

‘Willing to Listen’

“The decision shows that the government is willing to listen to the companies and reach a consensus,” said Laura Lyra Schuch, an analyst at Ativa Corretora in Rio de Janeiro. “More important is the upcoming regulatory changes for the industry. This indicates that if the government showed goodwill on this decision it may be willing to work on the regulatory changes.”

Banco do Brasil, Latin America’s biggest bank, increased 1.2 percent to 29.60 reais. The government is allowing international investors to hold up to 20 percent of the federally controlled bank’s shares, up from a previous 12.5 percent limit, the Brasilia-based lender said in a statement today. The government also authorized the bank to sell ADRs linked to voting shares.

In Mexico, the Bolsa climbed to the highest level since June 2008. The market was closed for a holiday yesterday, when global stocks rallied on signs of a recovering global economy.

Cemex SAB, the largest cement maker in the Americas, advanced 7.7 percent to 18.69 pesos. The American depositary receipts rose 7.9 percent yesterday after Federal Reserve Chairman Ben Bernanke said the recession in the U.S., Cemex’s biggest market, is “very likely over.”

Axtel SAB gained 4.6 percent to 9.72 pesos. Mexico’s second-biggest fixed-line phone company and sold $300 million of 10-year bonds and was upgraded to “buy” from “hold” at Banco Santander SA.

To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net;

Last Updated: September 17, 2009 17:05 EDT