The Bovespa (IBOV) index had the biggest two-day gain among the world’s major stock gauges as companies owned by the Brazilian billionaire Eike Batista surged after he signed a financing arrangement with Grupo BTG Pactual. (BBTG11)
OGX Petroleo (OGXP3) & Gas Participacoes SA, Batista’s oil company, soared the most in four years, while port developer LLX Logistica SA (LLXL3) rose to a six-week high. Petroleo Brasileiro SA (PETR4), Brazil’s state-controlled oil producer, gained after Credit Suisse Group AG raised its recommendation to the equivalent of buy following an unexpected increase in diesel prices. Utility Eletropaulo Metropolitana SA jumped the most since Oct. 2008.
The Bovespa jumped 1.6 percent to 58,846.81 at the close in Sao Paulo, extending a two-day gain to 5.2 percent, the biggest advance among 94 major stock gauges in the world, data compiled by Bloomberg show. Batista’s EBX Group Co. yesterday said it signed an agreement with BTG Pactual, the financial group led by billionaire Andre Esteves, which includes credit lines and future long-term capital investments in projects.
“The deal Eike struck with BTG is surely positive, as Esteves is a very respected person in the market,” Fernando Goes, an analyst at Sao Paulo-based brokerage Clear Corretora, said in a telephone interview. “It’s positive for the Bovespa because those companies have a big weighting on the index.”
BTG provided a $1 billion liquidity line to EBX Group, said a person with direct knowledge of the deal who asked not to be identified because details of the agreement haven’t been made public.
OGX, the fourth-heaviest weighted stock on the benchmark, jumped 16 percent to 3.40 reais. LLX rose 10 percent to 2.44 reais. Mining unit MMX Mineracao (MMXM3) & Metalicos SA surged 17 percent to 3.64 reais.
BTG shares rose 2 percent to 35 reais after earlier falling as much as 1 percent. Trading volume was 25 times the three- month daily average, data compiled by Bloomberg show.
Petrobras, as Petroleo Brasileiro is known, gained 5 percent to 18.95 reais after rallying the most since 2008 yesterday. The increase in diesel prices will help reduce losses from selling imported fuel at a discount as part of a government policy to curb inflation.
The price increase announced by Petrobras, whose chairman is Finance Minister Guido Mantega, could be a sign that the government is willing to make changes in its interventionist policies, Citigroup Inc. analysts Stephen Graham and Nicolas Riva said.
“The hike suggests the government understands the need to treat Brazil’s largest company better as far as its bottom line is concerned, since it loses money selling fuel below what it pays for imports,” Graham and Riva wrote in a note e-mailed to clients late yesterday.
Consumer-health company Hypermarcas SA (HYPE3) rose 2.8 percent to 18.10 reais after posting fourth-quarter earnings that beat analysts’ forecasts. Net income was 124.7 million reais in the three months ending in December, more than the average estimate of 90.1 million reais, according to data compiled by Bloomberg.
Eletropaulo jumped 9.7 percent to 12.23 reais, leading utilities higher. The MSCI Brazil/Utilities Index rose 3.6 percent to a four-month high.
The Bovespa has dropped 7.1 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 2.7 percent over the same period.
Brazil’s benchmark equity gauge trades at 11.9 times analysts’ earnings estimates for the next four quarters, compared with 10.6 for the MSCI Emerging Markets Index of 21 developing nations’ equities, data compiled by Bloomberg show.
Trading volume for stocks in Sao Paulo was 10.96 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.55 billion reais this year through Mar. 5, according to data compiled by the exchange.
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