Brazilian Stocks Gain on China Exports Report; Real Advances
June 9 (Bloomberg) — Brazilian stocks advanced for a second day as commodity prices rose after a report that exports and new loans surged in China, Brazil’s biggest trading partner.
Vale SA, the world’s largest iron-ore producer, climbed 2.7 percent after metals prices increased and UBS AG recommended buying the stock, citing its “very compelling” valuation. Petroleo Brasileiro SA rose to the highest price in more than three weeks as crude rallied and Brazil’s Senate prepared to vote today on a bill to allow the government to buy new shares in the state oil company and pay with rights to reserves.
The Bovespa stock index rallied 1.2 percent to 62,523 at 11:17 a.m. New York time. Fifty stocks rose on the index while 13 fell. The BM&FBovespa Small Cap index climbed 0.7 percent to 1,098.59. The real strengthened 0.6 percent to 1.8433 per dollar.
“The report is giving some support,” said Marcello Paixao, who helps manage 50 million reais ($27 million) at Principia Asset Management in Sao Paulo. “The index is gaining but without much conviction, because it’s not a fact, it’s like a rumor. Volumes are low.”
Brazilian stocks increased yesterday for the first time in three sessions after the nation’s economy expanded at the fastest annual rate since 1995 and commodity prices advanced.
China’s exports grew about 50 percent in May from a year earlier and new loans were 630 billion yuan ($92 billion), Reuters reported, citing three unnamed people who said a government official unveiled the figures at an investor conference today. The median estimate of 32 economists surveyed by Bloomberg News was for 600 billion yuan of new loans and a 32 percent increase in overseas shipments. Copper, nickel, lead, zinc and oil prices gained.
Vale Advances
Vale rallied 2.7 percent to 41.33 reais. The stock was boosted from “neutral” because the “shares have simply corrected too much,” UBS analysts including Rene Kleyweg wrote in a note to clients today. The Bovespa lost 14 percent from an April 8 peak through yesterday, while the Rio de Janeiro-based company slid 21 percent.
Petrobras gained 1.1 percent to 29.98 reais. The company, based in Rio de Janeiro, plans to buy 5 billion barrels of government-owned oil reserves with new stock and raise up to $25 billion from minority investors in the Western Hemisphere’s largest share sale in more than a decade. The sale will help fund as much as $220 billion of spending through 2014, the world’s biggest oil-industry investment program.
Offshore Fields
Brazilian lawmakers may also vote today on a bill to make Petrobras the operator of offshore oil fields with a minimum 30 percent stake in the so-called pre-salt region and other strategic areas, Romero Juca, the government leader in the Senate, said in Brasilia yesterday.
Fibria Celulose SA, the world’s largest pulp producer, jumped 4.9 percent to 28.27 reais on speculation growth in China’s economy will boost demand for the papermaking ingredient, according to Leonardo Alves, an analyst at Link Corretora in Sao Paulo.
Vivo Participacoes SA jumped 2.5 percent to 51.50 reais. Portugal Telecom SGPS SA, facing a 6.5 billion-euro ($7.8 billion) offer for its stake in the joint venture that controls Vivo, said Telefonica SA knows the asset is worth more than its bidding.
“Telefonica has consistently understated the intrinsic value of Vivo,” Chief Executive Officer Zeinal Bava said in comments sent today by e-mail. “When Telefonica talks about synergies, they are using brokers’ estimates and not their own estimates.”
Portugal Telecom is asking investors to vote June 30 on an increased bid from Madrid-based Telefonica for the Portuguese company’s stake in their venture.
To contact the reporters on this story: Alexander Cuadros in Sao Paulo at acuadros@bloomberg.net; Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net.
Source
