Ibovespa Futures Decline as Bradesco Cuts Ratings on Retailers

Ibovespa futures slipped, after the equity index rose yesterday to the highest since May, as Banco Bradesco SA (BBDC4)’s brokerage unit cut its outlook on retailers, citing concern that economic growth in Brazil will falter.

Airline Gol Linhas Aereas Inteligentes SA (GOLL3) may be active after saying a measure of profitability known as net yield, or the average fare paid by a passenger to fly a kilometer, increased 25 percent in September from a year earlier. Beef producer Marfrig Alimentos SA (MRFG3) may move after Morgan Stanley cut its recommendation on the stock to the equivalent of hold.

Ibovespa futures contracts expiring in December sank 0.1 percent to 55,005 at 9:25 a.m. in Sao Paulo. The real weakened 0.5 percent to 2.1867 per U.S. dollar. Bradesco Corretora cut its recommendation on retailers Lojas Renner SA (LREN3) and Restoque Comercio e Confeccoes de Roupas SA to the equivalent of hold. Online seller B2W Cia. Digital was lowered to sell.

“The sector remains challenging,” Bradesco Corretora analysts Ricardo Boiati and Pedro Bueno wrote in a note to clients. “Brazil’s macroeconomic dynamics are uncertain, if not unfavorable.”

The Ibovespa entered a bull market Sept. 9 after rising 20 percent from this year’s low on July 3 through that day. The gauge is still down 14 percent in dollar terms this year, compared with a decline of 1.4 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume of stocks in Sao Paulo yesterday was 8.43 billion reais, compared with a daily average of 7.61 billion reais this year through Oct. 17, 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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