Light SA advanced to an eight-month high amid a surge in trading volume as Brazil’s utility regulator allowed the company to increase electricity rates after previously signaling it might order a reduction.
The shares rose 2.2 percent to 20.65 reais at the close of trading in Sao Paulo, the highest since March 12. Trading volume was more than six times the daily average of the past three months. The gain was the third biggest among stocks on the Ibovespa benchmark, which declined 1.1 percent.
Aneel, which oversees Brazilian electric utilities, said in a statement today that it allowed Light to increase rates by 3.7 percent effective Nov. 7. The regulator had said at a Sept. 5 preliminary meeting that it could order Light to cut rates by as much as 3.3 percent for households and 6.7 percent for businesses.
“That’s good for Light and a positive sign for Brazilian power utilities that they can get a fair rate review,” Sandro Fernandes, a trader at Belo Horizonte, Brazil-based brokerage firm Geraldo Correa, said in a phone interview.
President Dilma Rousseff last year demanded power companies cut the rates they charge customers as a condition to renew licenses expiring from 2015 to 2017.
The press office for Light, which distributes electricity in Rio de Janeiro state, didn’t respond to an e-mail and phone call seeking comment.