Ambev, Duke Paranapanema, Lojas Renner: Latin Equity Preview

By William Freebairn and Alexander Ragir

Aug. 14 (Bloomberg) -- The following companies may have unusual price changes in Latin America trading. Stock symbols are in parentheses, and share prices are from the previous close. Preferred shares are usually the most-traded class of stock in Brazil.

The MSCI Latin America Index rose 0.5 percent to 3,903.59.

Brazil

Cia. de Bebidas das Americas (AMBV4 BS): Latin America's biggest brewer posted an unexpected 10 percent decline in profit. Net income fell to 402.1 million reais ($249 million), or 66 centavos a share, from 448.7 million reais, or 72 centavos a share, a year earlier, the brewer said on its Web site. Profit trailed the average estimate of 722 million reais by six analysts surveyed by Bloomberg. Ambev fell 0.2 percent to 99.10 reais.

Cosan SA Industria e Comercio (CSAN3 BS): The world's biggest sugar-cane processor expects earnings to improve next year as declining sugar stockpiles push up prices, Vice Chairman Pedro Mizutani said in an interview. Sugar next year will likely stay above the 14 cents per pound needed for Cosan to profit from the sweetener as output in India and other countries declines, Mizutani said. Cosan fell 2.6 percent to 27.60 reais.

Duke Energy International Geracao Paranapanema SA (GEPA4 BS): The Brazilian unit of Duke Energy Corp. may sell 470 million reais ($292 million) of bonds in the local market, according to a filing posted yesterday on Brazil's securities regulator Web site. Duke Paranapanema canceled plans in March to sell 750 million reais of floating-rate senior notes because of ``unfavorable market conditions.'' Duke rose 4.4 percent to 39.50 reais when it last traded on Aug. 5.

Lojas Renner SA (LREN3 BS): Brazil's biggest clothing retailer said yesterday that second-quarter profit rose 15 percent from a year earlier to 46.6 million reais. That's less than the 52.7 million reais average of four analyst estimates compiled by Bloomberg. The stock was cut to ``neutral'' from ``buy'' at Merrill Lynch & Co. Renner fell 3.4 percent to 30 reais.

OGX Petroleo e Gas Participacoes SA (OGXP3 BS): The oil company controlled by billionaire Eike Batista said it had a second-quarter loss of 274.6 million reais ($170.1 million) in the company's first earnings report since its initial public offering on June 12. Profit excluding costs related to the company's IPO was 35.9 million reais. OGX fell 7.8 percent to 618 reais.

Cia. Vale do Rio Doce (VALE5 BS): Felix Resources Ltd., the coal company that appointed advisers last month following takeover approaches from several unnamed companies, rose the most in four years in Sydney trading on speculation Vale, the world's biggest iron ore miner, may seek a takeover. There's ``speculation that a bid may be pending for them by Vale,'' Jamie Spiteri, head dealer at Shaw Stockbroking Ltd. in Sydney, said by telephone. Vale gained 2.8 percent to 35.56 reais.

Chile

Cencosud SA (CENCOSUD CC): Chile's biggest retailer, which does almost a third of its business in Argentina, has retreated 6.9 percent in the two days since Standard & Poor's cut Argentina's foreign-debt rating to B from B+. Investors have probably overreacted, Ramon Lagos, head of research at Penta Estrategia y Inversiones, said by phone from Santiago yesterday. Cencosud fell 3.8 percent to 1,480.30 pesos.

Empresas Copec SA (COPEC CC): Second-quarter net income fell 5.1 percent to 148 billion pesos ($288 million), Chile's biggest wood-pulp producer wrote yesterday in an e-mailed statement, beating the 144 billion peso average forecast of five analysts surveyed by Bloomberg. Copec fell 1.7 percent to 6,490.20 pesos.

La Polar SA (LAPOLAR CC): Shares of the department store operator probably may rise after reporting second-quarter earnings before interest, taxes, depreciation and amortization yesterday that beat estimates, Bice Inversiones wrote. Ebitda jumped 28 percent to 22.9 billion pesos, exceeding Bice's forecast of 20.4 billion pesos, analysts wrote in a note to clients. La Polar advanced 1.6 percent to 1,890 pesos.

Mexico

Bolsa Mexicana de Valores SAB (BOLSA MM): Shareholders of the operator of Mexico's only stock exchange approved a plan to buy back as much as 400 million pesos ($39.4 million) of its own shares, the company said in a statement yesterday. Bolsa Mexicana shares gained 1.1 percent to 13.04 pesos.

Corporacion Durango SAB (CODUSA* MM): Mexico's largest paper maker had its credit rating reduced two levels to CCC-by Standard & Poor's Ratings Services, which said the company won't be able to pass increasing costs for materials and energy on to consumers. It is ``uncertain'' whether the company can meet an October coupon payment on notes, S&P said yesterday in a statement. Codusa, as the company is also known, rose 9.8 percent to 7.30 pesos.

Grupo Gigante SAB (GIGANTE* MM): The retailer that operates Office Depot and Radio Shack stores in Mexico was upgraded by Citigroup Inc. to ``hold'' from ``sell.'' Gigante, which sold its supermarket operations in December, may use the proceeds to buy control of the Office Depot chain in Latin America, increase real estate holdings or enter a new business, analyst Eduardo Estrada Lopez wrote in a research report dated yesterday. Gigante was unchanged today at 16 pesos.

To contact the reporters on this story: William Freebairn in Mexico City at wfreebairn@bloomberg.net; James Attwood in Santiago at jattwood3@bloomberg.net.