The Bovespa (IBOV) index rose to a one- week high as homebuilder PDG Realty SA Empreendimentos & Participacoes (PDGR3) rallied amid speculation earlier losses were excessive given a positive outlook for its business.
PDG jumped the most since January. OGX Petroleo & Gas Participacoes SA (OGXP3), the oil company controlled by billionaire Eike Batista, gained after posting a net loss in the fourth quarter that was less than analysts had forecast. Marfrig Alimentos SA dropped ahead of its earnings release after the market close today.
The Bovespa climbed 0.7 percent to 56,034.29 at the close of trading in Sao Paulo. Forty stocks rose on the gauge while 28 dropped. The real gained 0.3 percent to 2.0110 per dollar after the central bank intervened to stem declines.
“Trading near 55,000, the Bovespa is cheap,” Rodolfo Amstalden, an analyst at consulting firm Empiricus Research, said by phone from Sao Paulo. “PDG reported awful earnings in the fourth quarter, but investors may be buying now thinking about the long-term perspectives for the company. Looking at the next 18 to 24 months, the outlook for the industry as a whole, PDG included, is positive.”
PDG Realty gained 5.4 percent to 3.13 reais. The stock earlier tumbled as much as 4.4 percent after it reported an unexpected net loss of 1.79 billion reais in the fourth quarter. PDG officials informed analysts of their plans to reduce costs during a conference call today to discuss their fourth-quarter loss.
“We don’t want to look back to the past anymore,” Carlos Piani, PDG’s chief executive officer, said in a phone interview from Sao Paulo. “Our objective is to be geographically smaller, focusing on the areas that have the best potentials.” Piani didn’t provide details on which expenses will be reduced.
OGX, the worst-performing stock this year on the Bovespa index, gained 3.9 percent to 2.39 reais. The company posted a net loss of 264.3 million reais in the three months ending in December, which compares with the average estimate for a loss of 302.5 million among analysts surveyed by Bloomberg.
Marfrig slumped 2.7 percent to 8.90 reais.
Gains on the Bovespa were limited as commodity producers Cia. Siderurgica Nacional (CSNA3) SA and MMX Mineracao & Metalicos SA fell. Stocks in the U.S. declined as the leader of Italy’s Democratic Party ruled out the possibility of a broad coalition government, while Cyprus’s banks planned to open for six hours tomorrow with capital restrictions in place after shutting for almost two weeks.
“Political problems in Italy are making global investors more cautious,” Fernando Goes, an analyst at Sao Paulo-based brokerage Clear Corretora, said in a telephone interview.
CSN, as Cia. Siderurgica is known, fell 1.1 percent to 9.09 reais. MMX dropped 2.5 percent to 2.32 reais.
The Bovespa has retreated 11 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 lost 6.4 percent over the same period.
Brazil’s benchmark equity gauge trades at 11.4 times analysts’ earnings estimates for the next four quarters, compared with 10.8 for the MSCI Emerging Markets Index (MXEF) of 21 developing nations’ equities, data compiled by Bloomberg show.
Trading volume for stocks in Sao Paulo was 5.74 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.59 billion reais this year through March 25, according to data compiled by the exchange.
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