Ibovespa Leads Global Stock Advance as Itau Rallies on Earnings

The Ibovespa rose the most among the world’s stock benchmarks as Itau Unibanco Holding SA, Brazil’s largest lender, led banks higher after posting earnings that exceeded analysts’ estimates.

The MSCI Brazil/Financials Index was the best performer among 10 industry groups. BR Malls Participacoes SA advanced the most since 2011 after saying stores at shopping malls it owns reported a 13 percent increase in fourth-quarter sales.

The Ibovespa added 1.8 percent to 46,964.22 at the close of trading in Sao Paulo, the most among the 94 equity gauges tracked by Bloomberg. The real climbed 1.3 percent to 2.4086 per U.S. dollar at 5:37 p.m. local time. Financial stocks account for 27 percent of the Ibovespa’s weighting, according to data compiled by Bloomberg.

“Itau’s figures were really good,” Henrique Kleine, the head analyst at Sao Paulo-based brokerage Magliano SA, said in a phone interview. “The numbers show that despite the weaker economy, Brazilian banks are able to keep default rates under control and turn profits.”

Itau, the country’s biggest lender by market value, advanced 4.9 percent to 31.35 reais. Its parent company, Itausa-Investimentos Itau SA, gained 5.8 percent to 8.70 reais. The Sao Paulo-based lender reported recurring net income, which excludes one-time charges, of 4.68 billion reais in the fourth quarter, compared with the average estimate of 4.18 billion reais among 10 analysts surveyed by Bloomberg.

Banco do Brasil SA added 3.3 percent to 20.78 reais. Banco Bradesco SA climbed 2.3 percent to 25.83 reais.

BR Malls jumped 7.5 percent to 15.85 reais, the biggest one-day gain since September 2011.

‘Really Cheap’

The Ibovespa has tumbled 17 percent from a bull-market high on Oct. 22 as inflation exceeded policy makers’ target for a third consecutive year and concern mounted that higher government spending will lead to a reduction in the country’s credit rating.

Some of Brazil’s biggest companies are trading at “really cheap” levels following recent losses for the Ibovespa, said Luis Stuhlberger, who manages about 20 billion reais as the chief investment officer at Credit Suisse Hedging-Griffo.

Stuhlberger said at an event in Sao Paulo yesterday that he has added banks and oil company Petroleo Brasileiro SA to the funds he manages. Hedging-Griffo’s Verde Master FI Multimercado fund has outperformed 97 percent of its peers in the past 5 years, according to data compiled by Bloomberg.

Cia. Energetica de Minas Gerais, the utility known as Cemig, dropped 1.9 percent to 13.49 reais after Moody’s Investors Service placed its credit rating under review for a possible reduction. Beef producer Marfrig Global Foods SA lost 2 percent to 3.99 reais, leading declines in exporters, as a stronger real dimmed the outlook for sales outside Brazil.

Trading volume of stocks in Sao Paulo today was 7.03 billion reais, data compiled by Bloomberg show. That compares with a daily average of 6.25 billion reais this year, according to data from the exchange.

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