Brazilian Stocks Rise, Capping Weekly Gain; Airlines Advance

By Alexander Ragir and Paulo Winterstein

Dec. 12 (Bloomberg) -- Brazilian stocks rose, capping a weekly gain, as a plunge in oil prices spurred gains for airlines and analysts predicted that Brasil Telecom Participacoes SA’s acquisition by a rival may be completed soon.

Tam SA, the largest airline, extended its weekly gain to 12 percent as crude slid. Brasil Telecom jumped more than 5 percent after analysts said its acquisition by Telemar Norte Leste SA may be approved by regulators before a Dec. 21 deadline. Rossi Residencial SA led gains for homebuilders on speculation foreign investment in the industry may help ease the credit crisis.

“This crisis is going to pass and the people, especially foreign investors, that fled the market are going to come back at some time,” said Luis Carlos Fernandes Afonso, who oversees $32 billion reais in assets at Petros, Brazil’s second-biggest pension fund. “It is a good time to buy certain stocks. Next year is going to be much better than this year.”

The Bovespa gained 2.2 percent to 39,373.86. The gauge jumped 11 percent this week. Chile’s main stock index rose 0.7 percent. Mexico was closed for a holiday.

Tam rose 7.1 percent to 21.70 reais, while rival Gol Linhas Aereas Inteligentes SA added 4.7 percent to 10.26 reais. Oil prices slid 2.7 percent.

Brasil Telecom gained 5.5 percent to 20.05 reais. Brazil’s antitrust regulator ruled on the takeover yesterday, paving the way for Anatel, which regulates phone companies, to allow the deal to go through, JPMorgan Chase & Co. analyst Andre Baggio and Deutsche Bank AG analyst Rizwan Ali wrote in separate notes.

New Indexes

Rossi, Brazil’s third-biggest homebuilder, surged 5.3 percent to 3.59 reais. Enrique Banuelos, former chief executive officer of Spanish property developer Astroc Mediterraneo SA, is in talks with two Brazilian companies about creating a venture in the country, Valor Economico reported yesterday, citing company documents.

“The news was certainly positive,” said Guilherme Sand, who helps manage the equivalent of about $250 million at Solidus Brokerage in Porto Alegre, Brazil. “It shows that there’s still confidence in the industry,”

PDG Realty SA rose 2.5 percent to 9.49 reais.

Even Construtora e Incorporadora SA and Agra Empreendimentos Imobiliarios SA led gains on the Bovespa Small Cap index. Even jumped 17 percent, while Agra added 9 percent.

Retailers Rally

Lojas Americanas SA, Brazil’s biggest discount retailer, jumped 6.9 percent to 7.12 reais. Lojas Renner SA, the biggest publicly traded clothing retailer, rose 2.3 percent to 16.26 reais. B2W Cia. Global do Varejo, the largest Internet retailer, rose 6.8 percent to 28.20 reais.

Retailers have rallied this week on the prospect that interest rates may be cut as early as the next central bank meeting in January. On Dec. 10, the “majority” of policy makers “discussed the possibility of lowering” rates before voting to keep the so-called Selic steady.

The central bank’s statement “is a pretext to the idea that the central bank will cut rates at its next meeting, and that justifies this gain in retailers,” Sand said in a phone interview.

B2W jumped 26 percent this week.

The BM&FBovespa Small Cap index slipped 0.3 percent. The BM&FBovespa MidLarge Cap index gained 2.2 percent.

Chile’s Ipsa index rose 0.7 percent to close at 2,344.17, finishing the week with a 1.7 percent gain.

Banco Santander Chile, the country’s biggest lender, advanced for the first time in three days, climbing 4 percent to 21 pesos. Chilean banks probably will increase fee income by more than 10 percent and keep expenses under control next year, Deutsche Bank AG wrote in a note to clients today.

Ecuador Default

In Ecuador, President Rafael Correa halted payment on foreign bonds he calls “illegal” and “illegitimate,” putting the South American country in default for a second time in a decade. That “may cause some contagion in Argentina’s and Venezuela’s bonds because investors may think that both countries may follow this step,” said Claudio Loser, the former director of the International Monetary Fund’s Western Hemisphere department.

Argentina’s Merval stock index rose 0.8 percent to 1,098.20, capping a 9.2 percent weekly advance. Grupo Clarin SA, the biggest media company, rallied 9.5 percent to 5.4 pesos and energy company Petrobras Energia Participaciones SA rose to the highest in five weeks, climbing 3 percent to 2.4 pesos.

Peru’s Lima General slid 1.3 percent and Colombia’s IGBC slipped 0.5 percent.

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