Rossi Rises After Shifting Focus to High Income: Sao Paulo Mover
Rossi Residencial SA (RSID3), Brazil’s worst-performing homebuilder this year, rose the most in a month after saying it is shifting its focus to building more expensive projects and away from subsidized low-income housing.
Shares gained 3.9 percent to 3.17 reais at 11:51 a.m. in Sao Paulo after earlier advancing as much as 5.6 percent in the biggest intraday increase since March 6. It was the best performance on the benchmark Bovespa index, which fell 0.3 percent.
The homebuilder plans to reduce its participation in Brazil’s “My House, My Life” low-income housing program beginning this year, according to a regulatory filing late yesterday describing its investment plan for the three years through 2015. The Sao Paulo-based company said it will focus on projects for higher-income buyers and concentrate construction in seven metropolitan areas instead of the 120 cities in which it currently builds.
Itau BBA raised its recommendation on the stock to the equivalent of hold from sell after the announcement.
Rossi declined 33 percent this year through yesterday, while the benchmark index lost 8.3 percent during that same period. The BM&FBovespa Real Estate index slid 8.6 percent.
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