Ibovespa Falls Most in World as BR Properties Drops After Loss

The Ibovespa plunged the most among the world’s biggest equity gauges as real estate companies tumbled after BR Properties SA posted a surprise fourth-quarter loss, stoking concern that slowing growth will crimp earnings.

Homebuilder PDG Realty SA sank the most on the BM&FBovespa Real Estate Index, which dropped the most since July. Education company Anhanguera Educacional Participacoes SA lost the most in more than two years. Eletropaulo Metropolitana SA, the Brazilian power distribution unit of AES Corp., fell to the lowest since September as the country’s utility regulator prepared to vote on an appeal of the agency’s order to return 626 million reais to customers. OSX Brasil SA led a rout in companies founded by the former billionaire Eike Batista.

Brazil’s benchmark equity index retreated 2.1 percent to 46,599.76 at the close of trading in Sao Paulo, with 66 stocks lower and seven higher. The real lost 0.2 percent to 2.3952 per dollar at 5:23 p.m. local time.

“When it comes to the real estate sector, it all comes down to how the economy is doing,” Pedro Galdi, the head strategist at SLW Corretora in Sao Paulo, said by phone. “And the way things are now, with many signs that economic activity is slowing, these stocks become a very risky choice.”

Economists covering Brazil cut their forecasts for 2014 and 2015 growth to 1.79 percent and 2.1 percent from 1.9 percent and 2.2 percent a week earlier, according to a central bank survey published yesterday.

BR Properties dropped 5.8 percent to 15.83 reais, the biggest one-day plunge since May 2010. The company’s adjusted net loss of 149.1 million reais in the fourth quarter compared with an average estimate from analysts surveyed by Bloomberg of 57.4 million reais in profit.

Eletropaulo Sinks

PDG sank 8.9 percent to 1.53 reais. The BM&FBovespa Real Estate Index declined 3.3 percent, with 17 of its 20 members lower. Anhanguera dropped 8.8 percent to 11.88 reais.

Eletropaulo declined 4.8 percent to 7.90 reais. The utility regulator known as Aneel has ordered the company to return 626 million to customers over four years after finding it overcharged them. The agency may vote on an appeal of the order today.

OSX plunged 19 percent to 59 centavos. Oleo & Gas Participacoes SA, formerly known as OGX, lost 11 percent to 24 centavos. Eneva SA, which Batista founded as MPX Energia SA, tumbled 12 percent to 1.96 reais.

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

Trading volume of stocks in Sao Paulo today was 6.9 billion reais, according to data compiled by Bloomberg. That compares with a daily average of 6.47 billion reais this year, according to data from the exchange.

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