Copel Gains on Regulator Approval to Raise Rate: Sao Paulo Mover
Copel, as the power company is known, gained 7.8 percent to 29.77 reais at 12:25 p.m. in Sao Paulo, the steepest advance since April 5 on a closing basis. It led advances on the benchmark Ibovespa index, which added 1 percent.
The utility said in a filing yesterday it will raise rates by 9.55 percent retroactively from June 24. The shares posted a record plunge on June 21 after a rate increase of as much as 14.61 percent was suspended amid growing nationwide protests over inflation and corruption. Copel can further raise rates next year to make up the difference between the actual and previously expected increase, Romeu Rufino, head of Brazil’s electricity regulator Aneel, said yesterday in Brasilia.
“This is good news for Copel as it ends the uncertainties about the postponement of its tariff adjustment,” Oswaldo Telles and Frederico Lebre, analysts at Banco Espirito Santo SA, wrote in a note to clients today. It also “confirms that all the postponed part of the increase will be compensated in the future, with no economic loss to the company.”
Copel, based in Curitiba, Brazil, has declined 6.1 percent this year, while the Ibovespa lost 25 percent in the period.
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