Ibovespa Futures Decline as Brazil Manufacturing Forecast Cut

Ibovespa futures dropped as economists covering Brazil lowered 2013 and 2014 forecasts for manufacturing growth, adding to concern that the recovery in Latin America’s largest economy will falter.

OSX Brasil SA (OSXB3), the shipbuilder controlled by Brazilian billionaire Eike Batista, may move after announcing a new business plan where it pledged to prioritize cash-generating projects in its leasing unit and to reduce the speed of the Acu shipyard construction. Card-payment processor Cielo SA (CIEL3) may be active after Banco Itau BBA SA lowered its recommendation to the equivalent of hold.

Ibovespa futures contracts expiring in June lost 0.1 percent to 55,000 at 9:09 a.m. in Sao Paulo. The real weakened 0.2 percent to 2.0321 per dollar.

Brazil’s industrial output will grow 2.50 percent this year and 3.50 percent in the next, according to the median estimate from about 100 economists surveyed by the central bank. They had forecast expansion of 2.53 percent and 3.55 percent respectively a week earlier.

The Ibovespa has declined 9.5 percent this year, the most among 19 major emerging markets, data compiled by Bloomberg show. Brazil’s benchmark equity index trades at 12.2 times analysts’ earnings estimates for the next four quarters, compared with a multiple of 10.9 for the MSCI Emerging Markets Index of 21 developing nations’ equities, data compiled by Bloomberg show.

Trading volume for stocks in Sao Paulo was 6.94 billion reais ($3.42 billion) on May 17, compared with a daily average of 7.72 billion reais this year through May 16, according to data compiled by the exchange.

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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