Oct. 5 (Bloomberg) -- Brazilian utilities rallied in Sao Paulo trading, with the benchmark measure capping the biggest two-day gain in almost five months, after this week’s elections eased the outlook for political risk.
“The results from the state government elections were overall positive for utilities,” Barclays Plc analysts led by Felipe Mattar wrote in a note to clients today. Brazilians voted Oct. 3 for governors, lawmakers and the president.
Barclays raised Cia. Energetica de Minas Gerais, known as Cemig, and Cia. de Saneamento de Minas Gerais, or Copasa, to “overweight” from “equal weight,” saying Minas Gerais state’s re-elected Governor Antonio Anastasia will maintain a “market-friendly” stance. Elections in Sao Paulo and Parana states were “positive” for Cia. Energetica de Sao Paulo, or Cesp, Cia. de Saneamento Basico do Estado de Sao Paulo, Sabesp, and Cia. Paranaense de Energia, Copel, the analysts said.
The MSCI Brazil/Utilities Index gained 2.9 percent at 4 p.m. New York time, for a two-day advance of 4.8 percent, the biggest since May 11. Gains were led by state-controlled power company Cesp, which jumped 4.1 percent to 27.69 reais, while Copel, the largest electricity distributor in Brazil’s southern region, advanced 3.6 percent to 40.15 reais.
Brazilians will vote again Oct. 31 to resolve runoff races, including the presidency.
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