By Carla Mozee
Brazilian stocks rose Wednesday, buoyed in part by an advance
among communications stocks as Spain's Telefonica SA ramped up its
pursuit of Brazilian wireless giant Vivo Participacoes SA.
The advance in Brazil's Bovespa equity index was in line with
gains among its regional peers and coincided with a strong advance
on Wall Street. U.S. shares got a lift from news that pending U.S.
home sales rose 6% in April as buyers rushed to beat the expiration
of a tax subsidy. The S&P 500 Index (SPX) climbed 2.5% and the
Dow Jones Industrial Average surged 225 points. (DJI).
The Bovespa finished up 1.8% at 62,942.91, nearly wiping out its
1.9% loss on Tuesday.
The broad-based gains in Wednesday's session were led by
communications, finance, home building and transportation stocks.
Shares of air carrier Gol (GOL) rose 3% and rival Tam (TAM) jumped
4.5%.
Stock in market heavyweights Petrobras (PBR) and Vale (RIO),
meanwhile, ended 1.6% and 2.1% higher, respectively.
The communications group rose 3.5%, with overall gainers on the
Bovespa led by an 8.8% surge in shares of telecom company Oi
(TNE).
"We believe that [TIM Participacoes] or even Oi could be
potential assets for Portugal Telecom," wrote Bradesco analyst Luis
Azevedo in a note to clients in the wake of Telefonica's raised bid
for Portugal Telecom's stake in Vivo (VIV).
Portugal Telecom (PT) is unlikely to leave Brazil, said Azevedo,
but Telefonica's new offer may encourage the company to look for
another Brazilian asset in which to invest.
"The big question would be negotiating with Telecom Italia or
even Oi's controlling shareholders (which includes the Brazilian
government)," he wrote.
Telefonica's new bid for Portugal Telecom's stake in Vivo now
stands at 6.5 billion euros ($8 billion), up from a bid of 5.7
billion euros which was rejected in May. Telefonica and Portugal
Telecom are joint-venture partners in Vivo.
Shares of Vivo (VIV) ended up 0.3%.
Mobile services provider TIM (TSU) is the Brazilian unit of
Telecom Italia (TI). Its shares rose 1.7%.
Elsewhere on the deal front, shares of Gerdau (GGB) rose 2.6%
after the steel maker proposed a $1.6 billion buyout of the shares
it doesn't already own in its U.S. unit, Gerdau Ameristeel.
"We believe this move indicates management's confidence on the
recovery of the U.S. operations, which most investors might not be
fully pricing in," said Credit Suisse analyst Ivan Fadel in a note
to clients.
As Ameristeel becomes a wholly-owned subsidiary, "Gerdau should
benefit from a more simplified corporate structure; synergies as
well as a more efficient decision-making process," he wrote.
Elsewhere, Mexico's IPC index rose 0.5% to 31,411.91.
Argentina's Merval gained 1.7% to 2,243.69, and Chile's IPSA rose
1.2% to 3,883.73.