Ibovespa Posts Weekly Advance as Vale Gains on Commodity Rebound

The Ibovespa posted its biggest weekly rally since September as iron-ore producer Vale SA (VALE5) led gains among raw-material producers after commodities rebounded.

Steelmaker Gerdau SA (GGB) advanced to its highest level in three weeks in the best performance on the MSCI Brazil/Materials Index. Gains on the benchmark gauge were limited as some state-controlled companies including lender Banco do Brasil SA (BBAS3) dropped after a poll indicated that President Dilma Rousseff would win re-election.

The Ibovespa added 0.2 percent to 47,380.94 at the close of trading in Sao Paulo, extending a weekly gain to 5.4 percent. Forty-three stocks advanced while 29 fell today. The real strengthened 0.1 percent to 2.3254 per U.S. dollar at 5:25 p.m. local time. The Standard & Poor’s GSCI index of 24 raw materials snapped a two-day drop, climbing 0.2 percent.

“Materials producers are benefiting today from the higher prices of commodities,” Victor Penna, an analyst at Banco do Brasil SA, said in a phone interview from Sao Paulo. “They’re all recovering from heavy losses this year.”

The MSCI Brazil/Materials Index has lost 17 percent this year, the most among 10 industry groups.

Vale added 2.1 percent to 27.20 reais today. Gerdau rose 2.5 percent to 14.50 reais.

Election Poll

The Ibovespa declined as much as 1.2 percent earlier today as a voter poll by Ibope showed that Rousseff would probably garner 43 percent of the vote and win the October presidential election, according to a report on newspaper O Estado de S. Paulo.

Voting shares of state-owned Centrais Eletricas Brasileiras SA (ELET3), a power utility, declined 0.3 percent to 5.75 reais. Banco do Brasil lost 1.1 percent to 20.67 reais.

“Government intervention has detracted from the performance of those companies for many years,” Jason Vieira, an economist at consulting firm MoneYou in Sao Paulo, said in a telephone interview. “Investors think that a change in the government could lead to better management.”

Rousseff’s office didn’t immediately respond to a phone call and e-mail from Bloomberg News seeking comment.

For-profit college operator Estacio Participacoes SA plunged 5.8 percent to 21.43 reais, the worst performance on the Ibovespa. The company reported fourth-quarter adjusted net income of 45.1 million reais, compared with an average estimate of 66.6 million reais among six analysts surveyed by Bloomberg.

Brazil’s benchmark equity gauge entered a bear market on March 14 after falling 20 percent from its October 2013 high through that day. The gauge has since pared the drop to 16 percent.

Trading volume of stocks in Sao Paulo was 8.04 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 6.36 billion reais this year, according to data from the exchange.

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

To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net Richard Richtmyer

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