Ibovespa Rises as CSN Leads Commodity Producers on Share Buyback

The Ibovespa (IBOV) climbed, following its first weekly slide in May, as steelmaker Cia. Siderurgica Nacional SA (CSNA3) led an advance of raw-material producers after announcing a plan to buy back shares.

State-controlled oil company Petroleo Brasileiro SA (PETR3) contributed the most to the gauge’s increase after analysts raised their estimates for Brazil’s economic growth this year. Lenders Itau Unibanco Holding SA (ITUB4) and Banco Bradesco SA (BBDC4) extended their two-day declines as banks awaited a ruling from Brazil’s supreme court on savings account losses during the hyperinflation of the 1980s and 1990s.

The Ibovespa added 0.6 percent to 52,932.91 at the close of trading in Sao Paulo after dropping 2.5 percent last week. Fifty-one stocks rose on the benchmark gauge while 17 fell. The real was little changed at 2.2231 per dollar at 5:25 p.m. local time. U.S. markets are closed today for a holiday.

“The American markets are closed, so investors prefer to buy stocks of commodity producers, which are always a safe haven,” Sandro Fernandes, a trader at the brokerage firm Geraldo Correa, said in a phone interview from Belo Horizonte, Brazil.

CSN rose 3.7 percent to 9 reais while the MSCI Brazil/Materials Index added 0.9 percent. CSN plans to buy back as many as 58.3 million shares by June 25, according to a regulatory filing after the market closed May 23. That’s equivalent to about 8 percent of the company’s free float, data compiled by Bloomberg show.

Petrobras, as Petroleo Brasileiro is known, increased 0.9 percent to 17.86 reais. MRV Engenharia e Participacoes SA rallied 3.2 percent to 6.78 reais.

GDP Outlook

Economists raised Brazil’s gross domestic product growth forecast this year to 1.63 percent from 1.62 percent, according to the median of estimates in a weekly central bank survey published today.

Itau fell 0.3 percent to 35.68 reais and Bradesco retreated 0.4 percent to 32.70 reais.

Brazil’s Supreme Federal Tribunal will rule May 28 on a case in which depositors sued Brazilian lenders over savings-account losses related to government policies to curb hyperinflation 20 years ago.

The Ibovespa entered a bull market on May 7, surging 20 percent from this year’s low on March 14, as Petrobras rallied on speculation a change in government will reduce intervention in state-run companies.

Trading volume of stocks in Sao Paulo was 2.18 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 6.71 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 Dennis Fitzgerald

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