The Ibovespa led gains among the world’s major stock benchmarks after Petroleo Brasileiro SA reported its 2014 results, ending a five-month debate on writedowns related to Brazil’s biggest corruption scandal.
Petrobras, as the state-controlled oil producer is known, pared an earlier plunge of as much as 9.4 percent. Its American depositary receipts rose 5.3 percent in New York. Brazil’s stocks also joined advances in commodities after weaker-than-estimated economic data in China, the nation’s largest trading partner, fueled bets the government will bolster growth. Vale SA, the largest iron-ore producer, extended a three-day jump to 17 percent.
The Ibovespa climbed 2 percent to 55,684.85 at the close of trading in Sao Paulo, the highest level since Nov. 21. Petrobras reported writedowns of 50.8 billion reais ($16.9 billion) that drove a 2014 net loss of 21.6 billion reais and wiped out dividend payments. The delay in reporting the figures had shut off the company’s access to financing and destabilized the Brazilian market.
“Brazil gave a big step in the right direction with the release of Petrobras’s earnings,” Alvaro Marangoni, a partner at Quadrante Investimentos, which oversees $500 million, said in a phone interview from Sao Paulo. “The release will help investors price other local assets accordingly.”
The oil company disclosed an impairment of 44.6 billion reais, mainly from overpriced and unfinished refinery projects. That charge overshadowed a corruption-linked writedown of 6.2 billion reais.
The list of troubles at Petrobras swelled since last year, when police arrested its former head of refining, Paulo Roberto Costa, revealing a money-laundering and corruption scandal. A combination of missed production targets, mounting debt and gasoline subsidies has eroded confidence in the biggest producer in deep waters, shrinking its market value to less than $60 billion from $310 billion in 2008.
Petrobras declined 1.5 percent to 12.92 reais. Its ADRs advanced to $9.40, extending a two-day rally to 9.6 percent. Wagers on a decline in U.S.-traded shares climbed to a record 16.25 percent of shares outstanding Wednesday, according to data compiled by London-based Markit and Bloomberg.
The oil company’s $2.5 billion in bonds due 2024 gained 1.37 cents to 99.88 cents on the dollar. By disclosing the charge in its first audited results since August, Petrobras opens the way for renewed access to financial markets.
Raw-material companies had the biggest advance among 10 industries in the MSCI Brazil gauge, climbing 5.1 percent. The Standard & Poor’s GSCI gauge of commodities jumped 2 percent to the highest level this year. China’s central bank cut lenders’ reserve-ratio requirements on Monday after a report showed the slowest economic growth in six years. Vale added 6.6 percent to 17.54 reais.