Gafisa SA led a rally for Brazilian homebuilders after gains in third-quarter sales indicated the industry is withstanding a slowdown in economic growth.
Gafisa, Brazil’s third-biggest homebuilder by revenue, increased 4.2 percent to a one-month high of 6.15 reais at the close of trading in Sao Paulo. Rossi Residencial SA, the sixth-biggest, rose 1 percent to 10.42 reais as the BM&FBovespa Real Estate Index advanced 1.7 percent. The benchmark Bovespa index lost 0.1 percent.
Gafisa’s contracted sales climbed 2.6 percent from a year earlier to 1.05 billion reais ($594.7 million), while Rossi’s expanded 14 percent to 917 million reais, according to regulatory filings from the companies detailing preliminary results. The figures led Paulo Renelli Neto, an analyst at Banco J. Safra SA in Sao Paulo, to reiterate his “outperform” recommendation for Gafisa, while Banco BTG Pactual SA maintained its “buy” on Rossi.
Rossi presented “stable sales speed” that indicated “no meaningful deceleration,” BTG analyst Marcello Milman said in a report today.
Homebuilders are among the biggest decliners on the Bovespa this year amid the fastest inflation since 2005 and expectations gross domestic product will expand at less than half of 2010’s 7.5 percent pace. Gafisa is down 49 percent this year while Rossi has lost 30 percent. The Bovespa is down 21 percent in the period.
Consumer prices jumped 7.3 percent in the 12 months through September, according to the national statistics agency. Economists expect Brazilian GDP to grow 3.4 percent this year, the weekly central bank survey published Oct. 17 showed.
BR Malls Participacoes SA, Brazil’s biggest owner of malls, advanced 2.4 percent to 19 reais. Sales in stores located in the shopping centers it operates rose 24 percent to 3.9 billion reais in the third quarter, the company said in a filing on preliminary results.
“We maintain our positive view on the stock, as we believe that the company is on track to delivering strong results and represents a defensive play in the current uncertain environment due to the predictability of its base rent component in revenues,” Guilherme Assis, an analyst at Raymond James & Associates Inc., wrote in a note to clients dated yesterday. He rates BR Malls “outperform.”
Smaller rival Aliansce Shopping Centers SA increased 1.4 percent to 12.88 reais after saying sales in its malls rose 28 percent to 1.23 billion reais.