Consorcio Ara SAB, a Mexican homebuilder whose shares have defied an industry selloff, rose the most in four weeks after second-quarter earnings fell less than expected and UBS AG raised the stock to a buy.
The shares surged 7.7 percent to 4.63 pesos at 2:42 p.m. in Mexico City, the biggest jump on a closing basis since June 27. The rally was the biggest on the IPC SmallCap Index, which climbed 0.7 percent.
Ara, based in Mexico City, reported today that second-quarter net income fell 6 percent from a year earlier to 145.5 million pesos. That compares with the average estimate of 134 million pesos from four analysts surveyed by Bloomberg. Ara’s shares have gained 10 percent this year, while the Mexico Habita Index of homebuilders has lost 64 percent.
“The numbers are OK,” Javier Gayol, a Latin America housing equity analyst at Mexico City-based brokerage firm Corporativo GBM SAV, said in a telephone interview. “They are not the best numbers you could imagine. However, we are certain they have been by far the best numbers in the Mexican housing sector.”
UBS upgraded the homebuilder from neutral today, citing Ara for halting “sales decreases and delivering important price increases in a tough market.”