The Bovespa index declined for a fourth day as MRV Engenharia & Participacoes SA led a rout in homebuilders after it became the most recent Brazilian company to post earnings that trailed analysts’ estimates.
LPS Brasil Consultoria de Imoveis SA fell to a four-week low after the real estate brokerage reported worse-than-expected fourth-quarter sales. The BM&FBovespa Real Estate Index dropped the most in five months. Construction materials maker Eternit SA rose to the highest since October after reporting a surge in exports that were driven by a weaker real.
The Bovespa declined 0.7 percent to 56,869.28 at the close of trading in Sao Paulo, extending this week’s slump to 2.7 percent. The real depreciated 0.6 percent to 1.9831 per dollar. Thirty-one of 44 companies on the benchmark index that have reported fourth-quarter earnings missed analysts’ estimates, according to data compiled by Bloomberg.
“We’ve seen many companies reporting earnings that were worse than expected in the fourth quarter, and the real estate industry is one of the sectors with the biggest disappointments,” Hamilton Moreira, a strategist at Banco do Brasil SA, said by phone from Sao Paulo.
MRV tumbled 8.1 percent to 9.80 reais. The company posted adjusted net income of 115.4 million reais in the fourth quarter, compared with the average forecast of 144.4 million reais among nine analysts surveyed by Bloomberg. The figures spurred Banco BTG Pactual SA to lower its recommendation to the equivalent of hold.
Gafisa SA, which on March 12 reported an unexpected quarterly loss, retreated 7 percent to 3.71 reais. LPS Brasil fell 1 percent to 35.25 reais. The BM&FBovespa Real Estate Index dropped 2.5 percent.
Positivo fell 3.7 percent to 4.43 reais.
The longer-term outlook for the Bovespa is still positive because the Brazilian economy is poised to post a stronger recovery this year, said Luciano Rostagno, the chief strategist at Banco WestLB do Brasil SA.
A report from the central bank today showed that Brazil’s economic activity index rose 1.29 percent in January after falling a revised 0.45 percent in December. The increase was the biggest since June 2008, when activity jumped 3.17 percent. Analysts had expected a 0.8 percent increase, according to the median of 21 estimates in a Bloomberg survey. The non-seasonally adjusted index rose 3.84 percent from a year ago.
“The economic activity index was a good sign,” Rostagno said in a phone interview from Sao Paulo. “The economy is expected to grow at a faster pace this year, which might give the Bovespa a boost.”
Eternit advanced 1.8 percent to 9.16 reais. The company said in a regulatory filing that exports rose 62 percent to 54.1 million reais in the fourth quarter. The real weakened 1.2 percent in the fourth quarter, part of a 9 percent slide in 2012 that bolstered exporters’ profit margins.
The Bovespa has dropped 10 percent from this year’s high on Jan. 3 amid concern accelerating inflation may curb Brazil’s economic recovery and the government’s interventionist policies will hurt profits in industries including utilities and energy. The MSCI BRIC Index of shares in Brazil, Russia, India and China has slid 4.4 percent over the same period.
Brazil’s benchmark equity gauge trades at 11.6 times analysts’ earnings estimates for the next four quarters, compared with 10.8 for the MSCI Emerging Markets Index of 21 developing nations’ equities, data compiled by Bloomberg show.
Trading volume for stocks in Sao Paulo was 9.22 billion reais today, data compiled by Bloomberg show. That compares with a daily average of 7.6 billion reais this year through March 13, according to data from the exchange.