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Ibovespa Rises to 11-Week High as Marfrig Leads Exporter Advance

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March 31 (Bloomberg) -- The Ibovespa climbed to an 11-week high as meatpacker Marfrig Global Foods SA led Brazilian exporters higher amid eased concern that the global economic recovery will falter.

Iron-ore producer Vale SA advanced as prices for the steel-making ingredient rallied the most in seven months. Cia. de Saneamento Basico do Estado de Sao Paulo, the water utility known as Sabesp, rose after posting a quarterly profit that exceeded analysts’ estimates.

The Ibovespa increased 1.3 percent to 50,414.92 at the close of trading in Sao Paulo, paring a quarterly slump to 2.1 percent. Fifty-seven of index’s 73 members gained today. The real fell 0.3 percent to 2.2683 per U.S. dollar at 5:22 p.m. local time. The MSCI All-Country World index rose 0.7 percent as inflation in the euro area was slower than forecast in March, spurring speculation that policy makers will take further steps to boost the region’s economy.

“If the European Central Bank indeed acts to strengthen the economy, that could boost investors’ demand for risk, helping to sustain the Ibovespa’s rebound,” Luciano Rostagno, the chief strategist at Banco Mizuho do Brasil SA in Sao Paulo, said in a phone interview.

Brazil’s main equity gauge has advanced 12 percent since it sank into a bear market March 14. State-run companies have rallied as a drop in President Dilma Rousseff’s approval rating fueled speculation she may struggle to win re-election in October after consecutive years of sputtering economic growth.

Voting shares of Centrais Eletricas Brasileiras SA, the federally controlled power utility known as Eletrobras, have surged 32 percent in March, the biggest monthly gain since 2005.

ETF Inflows

“Investors are betting that, among the candidates expected to run, Dilma would be the one less likely to enforce reforms to boost economic growth,” Rostagno said. “So markets react positively to news showing a decline in her popularity.”

U.S.-based exchange-traded funds that invest in Brazil posted the first back-to-back weekly inflows since August, according to data compiled by Bloomberg. Investors poured a net $44 million into Brazil-focused ETFs in the week ended March 28, following net inflows of $15.5 million during the previous week, the data show.

Eletrobras gained 4.8 percent to 6.60 reais today. Marfrig rallied 3.3 percent to 4.39 reais. Vale gained 1.9 percent to 28.35 reais. Iron ore for immediate delivery rose 4 percent to $116.80 a ton, the biggest gain since August, according to a price index compiled by The Steel Index Ltd.

Sabesp increased 2.5 percent to 21.10 reais. The company posted fourth-quarter adjusted net income of 590.7 million reais, more than the average estimate of 466 million reais among analysts surveyed by Bloomberg.

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net

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