- For-profit colleges fall amid concern on student-loan program
- Raw-material producers rebound as metal prices advance
Brazil’s benchmark Ibovespa index extended a second consecutive weekly drop as for-profit college operators tumbled on a report that students supported by a government-sponsored loan program are falling behind with their debt payments.
Kroton Educacional SA and Estacio Participacoes SA were the worst performers, helping push the MSCI Brazil/Consumer Discretionary Index to a three-month low. Almost half of the students backed by the loan program known as Fies aren’t keeping up with their payment schedules, Folha de S.Paulo reported Friday, citing a government report.
“Investors are very concerned about default rates linked to Fies, given the increase in unemployment and the economic slowdown,” said Rafael Ohmachi, a Sao Paulo-based analyst at Guide Investimentos brokerage.
The Ibovespa fell 0.2 percent to 40,612.21 at the close of trading in Sao Paulo, extending this week’s retreat to 6.3 percent. Twenty-nine of the index’s 61 stocks declined.
Losses on Brazil’s benchmark stock index were limited as commodity producers including steelmaker Cia. Siderurgica Nacional SA rallied, following metal prices higher. Emerging-market equities advanced after Chinese state-controlled funds were said to buy equities, the government suspended a controversial circuit-breaker system and the central bank set a higher yuan fix, helping curb volatility.