Ibovespa Rises Sixth Day as Higher Metal Prices Bolster UsiminasNey Hayashi
The Ibovespa rose for a sixth session, its longest winning streak in 11 months, as steelmaker Usinas Siderurgicas de Minas Gerais SA led gains in Brazilian exporters amid signs the global economy is recovering.
BRF SA, Brazil’s biggest maker of TV dinners and frozen pizzas, rallied to a record high. Meatpacker JBS SA rose for the first time in three days. Papermaker Klabin SA advanced to the highest level in two weeks. Oi SA plunged after the phone company reported an unexpected second-quarter loss and said it will cut dividend payments.
The Ibovespa climbed 0.3 percent to 50,754.11 at 12:27 p.m. in Sao Paulo. Thirty-three stocks gained on the index while 37 declined. The real was little changed at 2.3135 per dollar. The Bloomberg Base Metals 3-Month Price Commodity Index added 0.5 percent after data showed growth in Germany and France was stronger than economists forecast in the second quarter. Retail sales in the U.S. climbed for a fourth month in July, according to a separate report yesterday.
“Europe is recovering from a recession, the U.S. is giving unequivocal signs that the economy is getting stronger, and that helps to encourage investment in Brazilian equities,” Luciano Rostagno, the chief strategist at Banco Mizuho do Brasil in Sao Paulo, said in a phone interview.
Usiminas, as Usinas Siderurgicas is also known, rose 3.2 percent to 9.66 reais. BRF added 3 percent to 53.66 reais. JBS advanced 1.1 percent to 7.28 reais. Klabin gained 0.8 percent to 11.06 reais.
Oi tumbled 5.2 percent to 4.23 reais. The company reported a net loss of 124.2 million reais in the April-to-June period, which compared with an average estimate for adjusted net profit of 186.7 million reais. The company also said it plans to pay a dividend of 2 billion reais during the period from 2013 to 2016, compared with 4 billion reais it had told investors it would pay in 2014 and 2015. Last month, Oi canceled an additional 1 billion-real payment it had scheduled for this year.
The Ibovespa has gained 12 percent from this year’s low on July 3 as higher commodity prices boosted raw-material exporters and oil producer OGX Petroleo & Gas Participacoes SA led a rally by companies owned by Eike Batista. Brazil’s benchmark equity gauge trades at 13.3 times analysts’ earnings estimates for the next four quarters, compared with 10.6 for the MSCI Emerging Markets Index of 21 developing-nations’ equities.
Trading volume of stocks in Sao Paulo was 7.65 billion reais yesterday, compared with a daily average of 7.58 billion reais this year through Aug. 6, according to data compiled by the exchange.