The Brazilian stock market is sure very challenging for everyone this year, including the richest man in Brazil, Eike Batista. Out of his five companies listed in the Bovespa, only one is up in 2011. The others are deep in the red, under performing the Brazilian Bovespa index by several points – see chart below (via Exame).
His energy company rose 64% in 2011 and it is among the highest performers of the stock market. Within the Small Cap Index, it is second only to Banco Panamericano which went up 72% after being bailed out by the government.
According to analyst Ricardo Correa (Ativa Corretora), its recent upper performance is relatedto an energy auction to be held soon, which it has good chances of winning after Petrobras decided to pass.
OGX (sector: oil | performance: -30%)
The constant delays by OGX in the extraction of oil seem to have angered investors. After many promises, the date was decreed for the last week of 2011. Still, it remains to be seen.
HSBC said in a report that many operations’ improvements by the company are being ignored by the market. The company’s CFO, Marcelo Faber Torres said that OGX will have a positive cash flow in 2013.
LLX (sector: logistics | performance: -36%)
Like OGX, LLX is also a company in pre-operational stage. Its main project is the “Superporto do Acu”, which can become one of the three largest port complexes in the world. GE has just signed a letter of intent for the construction of a unit in the LLX complex.
OSX (sector: equipment & services | performance: -37%)
The shipbuilding company of the EBX group is also linked to the development of the “Eike Portfolio.” OSX has signed contracts (mostly with OGX, his other company) totaling US$5 billion for five ships and two fixed platforms (most with OGX, his other company). The company estimates that the number may reach US$30 billion.
MMX (sector: mining | performance: -42%)
The market didn’t like the third quarter results and shares fell further. The company posted a loss of R$243.2 million. In the same period last year, the company made a net profit of R$90.9 million.
For the analyst BB Investimentos, Victor Penna, the pace of growth should be even lower in the future. “In addition to seasonality weakness, expectations of a global slowdown will lead to lower consumption of iron ore.”