Brazil Stocks Gain, Led by Tim on Buyout Speculation; ALL Rises

By Paulo Winterstein

Nov. 26 (Bloomberg) -- Brazilian stocks advanced for a third day as Tim Participacoes SA surged after a report it may be sold and materials companies climbed on speculation their growth outlook has improved.

Tim climbed 18 percent on reports its parent, Telecom Italia SpA, may sell the Brazilian mobile-phone unit to Telefonica SA. ALL America Latina Logistica SA jumped 16 percent as investors bet Latin America’s largest railroad operator won’t see as big a drop in volume as projected. JBS SA, the world’s biggest beef producer, added 18 percent after Brazil said the European Union will resume the meat’s imports from three states.

A sale of Tim is “very plausible,” said Guilherme Figueiredo, who helps manage $700 million at M. Safra & Co. in Sao Paulo. “In this environment, where local companies or their overseas parents are having difficulties, you’re going to see a lot of consolidation happening.”

The Bovespa advanced 1,656.75, or 4.8 percent, to 36,469.61, extending its gain this week to 17 percent. The BM&FBovespa Small Cap index rose 3.1 percent. The BM&FBovespa MidLarge Cap index climbed 4.6 percent. Mexico’s Bolsa added 3.8 percent, while Chile’s Ipsa increased 0.4 percent.

Tim ordinary shares added 1.09 real to 7 reais, while the preferred stock gained 41 centavos, or 12 percent, to 3.87 reais. Telecom Italia is considering selling either its fixed- line network or its mobile phone unit in Brazil, Il Sole 24 Ore reported, without saying where it got the information. The most “natural” buyer for Tim would be Spain’s Telefonica, the Italian newspaper said.

Telecom Italia ‘Problems’

“The parent company is having some problems, so this is something that I think is going to happen,” Figueiredo said.

Telecom Italia would “have to come up with a significant surprise to offset the potential for more downside risks to 2009 forecasts,” Credit Suisse Group AG analyst Justin Funnell wrote in a note dated today.

ALL gained the most this month on the expectation that transported volume in the quarter will fall “only about 3 percent, removing a lot of the concern” about steeper drops due to more expensive credit for agricultural producers, said Marco Saravalle, a Sao Paolo-based analyst with Coinvalores Ltda., in a phone interview.

Brazil may boost loans to agricultural cooperatives and fund fertilizer distributors after global turmoil reduced farm financing, O Estado de S. Paulo said today, citing government officials.

“The market is a little less frightened,” Saravalle said.

JBS Climbs

JBS rose 73 centavos to 4.70 reais, the biggest gain in more than a month. The EU will resume imports on Dec. 1 from the center-western Brazilian states of Mato Grosso and Mato Grosso do Sul and the southeastern state of Minas Gerais, the Agriculture Ministry said today in a statement. Sao Paulo-based JBS operates seven of its 22 beef units in those three states.

The EU banned Brazilian beef imports in January, saying that the world’s biggest exporter of the meat failed to ensure its animals were healthy.

Mexico’s Bolsa rose for the third time in four days, led by Cemex SA. The largest cement maker in North America surged 25 percent, the most in at least 14 years, to 8.64 pesos. Cemex shares have risen by a third since economic advisers to U.S. President-elect Barack Obama said yesterday he may propose a plan of as much as $600 million to finance highway projects and other spending.

In other Latin American markets, Argentina’s Merval rose 5.3 percent, Colombia’s IGBC index added 2 percent, and Peru’s IGBVL rose 2.8 percent. The Morgan Stanley Capital International index of Latin American shares advanced 7.8 percent.

To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net