Tuesday, February 14, 4:45 PM EST (Thomson Financial): Latin American stocks
advanced, with Brazilian shares getting a boost from robust local retail sales
figures, while Mexico's bolsa found strength in stronger-than-expected U.S.
retail sales data.
Brazil's Bovespa Index jumped 512.93 points, or 1.42%. Mexico's benchmark
Bolsa Index climbed 139.38 points, or 0.78%, while Argentina's Merval Index
dipped 3.33 points, or 0.20%.
Brazilian stocks rallied, as investors were cheered by upbeat local retail
sales data. The Brazilian Census Bureau, or IBGE, reported that retail sales
volume rose a seasonally adjusted 1.19% in December from November, in line
with expectations of 0.50% to 2.50%. Retail sales climbed 4.28% in December
from a year earlier. According to IBGE, December sales "represented the best
results for retailers in the second half of 2005."
In other developments, a public opinion poll released today by the Sensus
polling organization showed Brazilian President Luiz Inacio Lula da Silva
favored to win reelection in October. The poll showed that Lula would get
40.2% of the vote, while his biggest opponent, Social Democrat Jose Serra,
would get 28.6% of the vote, and former Rio de Janeiro governor Anthony
Garotinho would be in third place with 10.5% of the vote. Both Lula and Serra
are regarded as market-friendly candidates.
On the corporate front, paper and pulp producer Klabin Celulose e Papel S.A
posted fourth-quarter net profits of 26.1 million reais, down sharply from
89.2 million reais a year earlier, due largely to the impact of the real's
appreciation against the U.S. dollar.
Meanwhile, budget airline Gol said it added flights between Argentina and
Paraguay. That is the airline's sixth South American destination outside of
Brazil.
Mexican shares finally turned higher, after bargain hunters moved in following
recent weakness. Tomorrow, investors will be looking for fourth-quarter and
full-year 2005 gross domestic product data.
Investors also looked to strength in the U.S. markets today, as retail sales
were stronger than expected in January. The majority of Mexican exports are
sent to the northern neighbor.
Topping earnings headlines, fixed-line phone company Telmex posted lower
fourth-quarter results due to declines in voice services and higher financial
costs. Telmex's sales slipped to 41.33 billion pesos from 42.46 billion pesos
a year earlier. Net profit fell to 7.78 billion pesos from 10.77 billion pesos
last year, while Ebitda declined 1.8% to 18.33 billion pesos. Telmex plans to
invest US$2.1 billion in 2006, the same amount invested in 2005.
Argentine shares moved lower for the fourth-straight session, while volume
levels improved somewhat, as options contracts are set to expire later this
week. Investors are still awaiting Argentina's earnings season to kick into
high gear. Last night, Banco Frances reported that it swung to a fourth-
quarter net profit, reversing a year-earlier loss.
-- Paul.Davee@thomson.com; Thomson Financial Corporate Services
This is Thomson Financial Corporate Services Latin American Commentary. The
information herein is believed to be true and accurate, we take no
responsibility for inaccurate information and reserve the right to update our
reports. If you have any questions please e-mail James Sang at
james.sang@tfn.com or call 646.822.6233. For more information about Thomson
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SOURCE Thomson Financial Corporate Group
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