Brazil's Stocks Rise Most in World as Petrobras Gains With Crude

  • Sao Paulo water-utility Sabesp at highest level since 2014
  • For-profit colege manager Estacio's low valuation lures buyers

Brazil’s Ibovespa stock index rose the most among global benchmarks as state-controlled oil producer Petroleo Brasileiro SA followed gains in crude.

Petrobras, as Petroleo Brasileiro is known, extended its biggest three-day advance since October. Shares of Cia. de Saneamento Basico do Estado de Sao Paulo, a water utility which last year warned that a drought might force it to cut supplies, climbed to the highest since Sept. 2014 after levels at its biggest reservoir increased. The higher water levels also boosted hydroelectric producers, including Cia. Energetica de Minas Gerais.

Friday’s rally trimmed the Ibovespa’s decline this month to 6.8 percent, the worst since August. Brazilian stocks fell in January as concerns that demand from China will slow sent prices for commodities to multi-year lows and as economists forecast a deeper decline in Brazil’s gross domestic product this year. Producers of raw materials make up about 20 percent of the index.

"The mood in the market as we finish this month is a little more positive because of the commodity gain and punctual good news we had in the past days, such as the relief for power utilities," Ari Santos, a trader at the brokerage H.Commcor, said from Sao Paulo. "Prospects for the economy in general haven’t improved, though, so we can’t say that this is an up trend."

The Ibovespa added 4.6 percent to 40,405.99 in Sao Paulo. The gauge advanced for a third consecutive day, its longest winning streak since mid-December. All but two of its 61 stocks gained Friday.

Petrobras rose 5.2 percent and Sabesp 2.2 percent. Cemig, as the hydroelectric power company is known, extended a three-day gain to 33 percent, the most since January 1999. Education company Estacio Participacoes SA rebounded from the cheapest valuation since 2009. Rival Kroton Educacional SA climbed 8.6 percent.

Speculation that the government may also increase student loans after deciding to offer 83 billion reais ($20.6 billion) worth of credit to agriculture, infrastructure, industry and construction also helped attract to investors, according to Santos.

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