Brazil Travel & Tourism
Brazil’s Bovespa Climbs Above 70,000 on Manufacturing, Economy
By Paulo Winterstein
Jan. 4 (Bloomberg) -- Brazilian stocks jumped, sending the Bovespa index above 70,000 for the first time since June 2008, as improving global manufacturing bolstered the outlook for commodity demand and growth in Latin America’s biggest economy.
Iron-ore producers Vale SA and MMX Mineracao & Metalicos SA advanced at least 2.9 percent after an industry report showed manufacturing in China, the biggest metals user, increased the most in five years last month. Petroleo Brasileiro SA and OGX Petroleo & Gas Participacoes SA climbed as crude jumped above $81 a barrel. Itau Unibanco Holding SA, Brazil’s biggest non- government bank, rallied the most in two months after analysts boosted their forecast for economic growth this year.
“The numbers from China were excellent,” said Carlos Camacho, who helps manage about $2 billion in assets at GAP Asset Management in Rio de Janeiro. “The manufacturing number means China growth will likely top estimates. That’s excellent for commodities and obviously this bodes well for Brazil.”
The Bovespa stock index rallied 2.1 percent to 70,045.08, building on last year’s best annual gain since 2003. The BM&FBovespa Small Cap Index added 0.8 percent to 1,182.49. The real strengthened 1.4 percent to 1.72 per U.S. dollar.
Among other Latin American markets, Mexico’s Bolsa index increased 2 percent, while Chile’s Ipsa added 1.1 percent. Argentina’s Merval Index surged 2.8 percent to a record.
China Manufacturing
Stocks rallied around the world after China’s purchasing managers’ index, a barometer of manufacturing, rose to a seasonally adjusted 56.1 in December. In the U.S., the Institute for Supply Management’s factory gauge climbed to 55.9, the highest level in more than three years. The countries are Brazil’s biggest trading partners.
Vale jumped 3.1 percent to 43.52 reais. China is the biggest export market for the world’s largest iron ore producer. MMX, controlled by billionaire Eike Batista, gained 2.9 percent to 12.71 reais.
The Bovespa surged 83 percent in 2009 as rising commodity prices and increased domestic demand helped pull the economy out of a recession faster than most nations. International investors added 20.5 billion reais ($11.9 billion) to their Brazilian stock holdings last year, the most since the exchange began tracking inflows in 1994, bourse owner BM&FBovespa said today.
Brazilian economists raised their estimate for 2010 growth to 5.2 percent from 5.08 percent a week ago, according to a central bank survey of 100 analysts published today.
Itau gained 4.1 percent to 40.12 reais. BM&FBovespa increased 5.7 percent to 12.95 reais.
Oil Advance
Crude oil climbed for an eighth day, trading above $81 a barrel for the first time in seven weeks, as freezing weather and improving economic prospects around the world boosted the outlook for fuel demand. Petrobras, as Brazil’s state-controlled oil producer is known, rose 1.7 percent to 37.32 reais. OGX, also controlled by Batista, climbed 3.3 percent to 17.67 reais.
Homebuilder PDG Realty SA Empreendimentos e Participacoes fell the most in the Bovespa after its biggest shareholder announced the sale of about 1.9 billion reais in stock. Other companies in the real estate industry declined on concern that valuations are expensive, GAP’s Camacho said.
PDG, which was added to the Bovespa index today, fell 5.5 percent to 16.40 reais. MRV Engenharia & Participacoes SA, which also joined the index today, dropped 2.5 percent to 13.75 reais. Cyrela Brazil Realty SA Empreendimentos & Participacoes, Brazil’s biggest homebuilder, declined 1.2 percent to 24.20 reais, while Gafisa SA, the second-largest, retreated 1.6 percent to 27.80 reais.
All four companies more than doubled last year on prospects a rebounding Brazilian economy will bolster demand. The rally pushed the BM&FBovespa Real Estate Index to 22.7 times the reported profit of its companies, compared with 7.62 at the beginning of 2009.
Mexico Stocks
In Mexico, the Bolsa index extended gains after a 44 percent rally in 2009. Cemex SAB, the largest cement maker in the Americas, and America Movil SAB, Latin America’s biggest wireless carrier, advanced after Mexican remittances fell 14 percent in November, the smallest decline in eight months, as U.S. job cuts slowed.
Grupo Mexico SAB, Mexico’s largest mining company, rose to the highest price in a month after copper futures for March delivery climbed to a 16-month high in New York and London as a strike began at the world’s second-biggest mine.
Source: businessweek.com