Brazil Malls Decline as Credit Suisse Says Overvalued

Brazilian shopping mall owners tumbled in Sao Paulo, led by Multiplan Empreendimentos Imobiliarios SA, after Credit Suisse Group AG said the stocks’ prices are “rich” relative to next year’s potential earnings.

Profit growth will slow as inflation peaks, Marcello Milman, an analyst at Credit Suisse in Sao Paulo, wrote in a note to clients dated yesterday. Credit Suisse predicts the central bank will raise the benchmark interest rate 2.75 percentage points to 13.5 percent next year to bring inflation down from the highest since April 2009, the note said.

“The buoyant outlook for the sector seems to be largely priced in,” Milman wrote. Credit Suisse cut its rating on Aliansce Shopping Centers SA to “neutral” from “outperform,” while Iguatemi Empresa de Shopping Centers SA was lowered to “underperform” from “neutral,” according to the note.

Multiplan fell 5.2 percent to 35.00 reais at the 3 p.m. New York time close, while BR Malls Participacoes SA dropped 2.7 percent to 16.15 reais. Milman rates both companies “neutral.” Aliansce rose 0.2 percent to 13.75 reais, while Iguatemi slid 3.1 percent to 40.76 reais. The BM&FBovespa Real Estate Index fell 0.6 percent.

To contact the reporter on this story: Alexander Cuadros in Sao Paulo at

To contact the editor responsible for this story: David Papadopoulos in New York at

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