Brazil Stocks Fall Most in 2 Weeks, Led by Tim, B2W; Bolsa Dips

By Alexander Ragir and William Freebairn

Dec. 15 (Bloomberg) -- Brazilian stocks fell the most in two weeks as analysts said retail sales may decline and telephone subscriber growth will slow as the economy weakens next year.

Retailers B2W Cia. Global do Varejo and Lojas Americanas SA dropped more than 8 percent after Credit Suisse AG said same- sales may contract 3 percent in 2009. Tim Participacoes SA fell the most in seven weeks after an executive transfer from the mobile-phone company’s Italian parent raised speculation Tim won’t be sold.

“There are a lot of uncertainties about the economy and how companies will be affected by the global crisis,” said Mirela Rappaport, who helps manage the equivalent of $48 million at Investport in Sao Paulo.

The Bovespa slid 1,053.67, or 2.7 percent, to 38,320.19. The gauge surged 11 percent last week. Mexico’s Bolsa slid 1.7 percent, while Chile’s Ipsa fell 0.9 percent. The MSCI Emerging Markets Index gained 2 percent.

Brazilian same-store sales may contract next year because of the slowing economy and tighter credit, Credit Suisse said, lowering its earnings estimates for companies including B2W. The brokerage had previously predicted growth of 3 percent.

B2W Drops

“Companies are already indicating some slowdown in consumption, starting especially in November, which should negatively impact fourth-quarter results,” analysts Marcel Moraes, Tufic Salem and Antonio Gonzalez wrote in a note.

Internet retailer B2W sank 9.2 percent to 25.60 reais after it had its share-price forecast cut to 33 reais from 54 reais.

Lojas Americanas, which controls B2W, plunged 8.7 percent to 6.50 reais, its steepest decline since Oct. 24.

Brazil economic growth will probably slow by more than half to 2.5 percent next year, according to the median estimate of about 100 economists in a central bank survey published Dec. 8.

Latin American phone companies will likely see narrower margins in 2009 as the global credit crisis leads to slower subscriber growth, Deutsche Bank AG said.

The “economic downturn in Latin America in 2009 should slow down telecom subscriber additions across the region, decrease ARPUs and pressure margins of telecom operators,” analyst Rizwan Ali wrote in a note. ARPU is average revenue per user.

Vivo Participacoes SA, the largest-mobile operator, fell 1.2 percent to 35.56 reais.

Tim Retreats

Tim tumbled 13 percent to 3.93 reais. Luca Luciani, the head of domestic mobile services for Tim parent Telecom Italia SpA, is moving to the Brazilian unit, according to a Tim spokesman who declined to be identified. Management changes will be announced this week, the spokesman said.

The move “throws water on the idea of a sale,” said Peter Lyons, analyst at Oscar Gruss & Son Inc. in New York. “If Telecom Italia is putting their best guys into the company, that means Telecom Italia sees Tim as very valuable.”

The BM&FBovespa Small Cap index fell 2 percent. The BM&FBovespa MidLarge Cap index dropped 2.2 percent.

Brazilian stocks have tumbled 40 percent this year as slowing global growth and tighter credit curbed demand for raw materials, leading to a selloff in commodity producers.

Mexico’s Bolsa index fell for a second day, led by mobile- phone operator America Movil SAB and cement-maker Cemex SAB.

America Movil

America Movil fell with other Latin American phone operators. Its Claro unit is Brazil’s second-biggest wireless company by market share.

Cemex, the biggest cement producer in the Americas, dropped to the lowest in a week after Deutsche Bank AG said the company may report later today fourth-quarter revenue and cashflow dropped more than 19 percent.

America Movil fell 4.8 percent to 21.05 pesos. Cemex dropped 6.2 percent to 10.71 pesos.

Banco Santander Chile, the nation’s biggest lender, fell 3.7 percent to 20.23 pesos on concern the global economic slowdown will reduce earnings.

“Banco Santander is the most liquid of Chile’s banks,” said Juan Partida, an analyst at UBS. “U.S. banks are falling sharply today and when there is a problem or increase in aversion towards the global financial sector, normally the one that gets hit the hardest in Chile is Banco Santander.”

Argentina’s Merval rose 1.5 percent, Colombia’s IGBC gained 1.1 percent and Peru’s IGBVL slipped 1.1 percent.

To contact the reporter on this story: Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net;