Ibovespa Rises on Prospects for Exports After China Reform Plan

The Ibovespa climbed for a third straight day on wagers demand for exports will increase after leaders in China, Brazil’s biggest trading partner, pledged to undertake reforms aimed at shoring up economic growth.

Vale SA (VALE5), the world’s biggest iron-ore producer, contributed the most to the gauge’s advance. Cia. de Saneamento Basico do Estado de Sao Paulo, the water utility known as Sabesp, rallied after revenue beat analysts’ estimates in the third quarter. Retailer Marisa Lojas SA (AMAR3) fell as profit slumped.

The Ibovespa rose 1 percent to 53,986.23 at 10:39 a.m. in Sao Paulo, extending a three-day gain to 4.2 percent. Sixty-two of its 72 member stocks climbed. The Brazilian real strengthened 1.3 percent to 2.2850 per dollar.

China pledged to allow more private investment in state-controlled industries and announced that couples may have two children if either parent is an only child, according to a Communist Party decision published by the official Xinhua News Agency on Nov. 15. President Xi Jinping’s reforms are aimed at giving more influence to market forces and loosening government controls.

“It’s good news for the Brazilian market to know that China is working to sustain a high rate of growth in the coming years,” Eduardo Velho, the chief economist at INVX Global Partners in Sao Paulo, said in a phone interview. “That means good prospects for Brazilian exports.”

Vale gained 1.4 percent to 32.85 reais. Sabesp added 1.8 percent to 25.42 reais, the highest price on a closing basis since June 7. Marisa declined 3.1 percent to 18.17 reais in the worst performance on the BM&FBovespa Small Cap Index.

Trading Volume

Brazil’s main equity index 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 21 percent this year in dollar terms, compared with a decline of 3 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume of stocks in Sao Paulo was 6.98 billion reais on Nov. 14, compared with a daily average of 7.55 billion reais this year through the same date, according to data compiled by the exchange.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

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

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