|Speculation raises small cap stock prices|
A wave of rumors washed over the Bovespa in recent months and placed some formerly illiquid companies under the spotlight during several trading sessions. The foremost was Telebrás, the remnant of Brazil's defunct state-owned telecommunications behemoth. Telebrás's shares appreciated by more than 600% over the six months ending February 22, according to data from the Economática consultancy firm. The rumors that the company would be brought back to life to provide universal broadband services were few and far between, but recent statements by President Lula put more fuel into the fire – despite the company's denial that any decision has been made, even when asked by the Brazilian Securities and Exchange Commission (CVM). While the rumor mill turns, investors are raising Telebrás to blue chip status. R$ 206.9 million's worth of the company's shares were traded in February alone (up to 2/22), a figure exceeded only by Petrobras, Vale and OGX.
There are cases where speculative movements were interrupted. With its registration suspended since February 11 due to noncompliance with the CVM's information disclosure requirements, Agrenco was still listed in fourth place on Economática's list published on February 22, presenting a rise of 295%. In others cases, such as Cobrasma's, speculation is proceeding at full speed. The company was once Latin America's largest railway supplies manufacturer, producing and assembling some of Brazil's major urban train networks. Now, with the announced bid procedure for construction of a bullet-train connecting São Paulo to Rio de Janeiro, the company's shares are back in the spotlight. Its trade volumes have been growing month by month. In September, Cobrasma's shares moved a mere R$ 28 K. By February, the figure had climbed to R$ 2.1 million.
Beyond rumors are the shares of Banco PanAmericano and their 74% appreciation in six months. The institution had 49% of its voting capital (36.6% of its total capital) acquired by Caixa Econômica Federal, thereby improving its risk ratings. "The risks characteristic of a small bank were reduced", says Clodoir Gabriel Vieira, an economist with the Souza Barros brokerage firm. Fernando Salazar, from Fator, agrees that there are benefits. "The trend is a reduction in PanAmericano's fundraising cost and an improvement to its profit margins", he says.