Ibovespa Falls as OGX Sinks to Record on Bankruptcy Speculation

The Ibovespa dropped for a second day as OGX Petroleo e Gas Participacoes SA tumbled to a record low amid speculation the oil company will file for bankruptcy protection as soon as today.

Industrial machinery manufacturer WEG SA (WEGE3) fell after reporting third-quarter sales that were below analysts’ estimates. Steelmaker Usinas Siderurgicas de Minas Gerais SA was the best performer on the benchmark gauge after posting its first profit in seven quarters.

The Ibovespa declined 1 percent to 53,984.48 at 10:59 a.m. in Sao Paulo, with 40 of its 73 member stocks lower. The real weakened 0.3 percent to 2.1912 per dollar.

“The main issue weighing on the Ibovespa is once again OGX,” Alvaro Bandeira, a partner at Orama Asset Management, said in a telephone interview from Rio de Janeiro. “It’s not like things are great for the Ibovespa, but it isn’t as bad as today’s move shows. Today, OGX is doing most of the damage.”

OGX sank as much as 26 percent to 17 centavos. The company may file for bankruptcy protection in Rio de Janeiro after the close of trading today, according to a person with direct knowledge of the plans who asked not to be identified before documents are filed. An official at OGX’s press office declined to comment.

Usiminas, as Usinas Siderurgicas is known, gained 4.2 percent to 11.79 reais. Weg lost 0.2 percent to 29.11 reais.

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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