Wednesday, March 15, 4:45 PM EST (Thomson Financial): Latin American
stocks witnessed another collectively strong session, led by Brazil on
optimism for the Social Democrats market-friendly presidential candidate.
Mexico also moved higher, and Argentina surged. Also aiding the region was
strength in U.S. shares on the back of a strong economic report in the form of
the Beige Book.
Brazil's Bovespa Index surged 702.50 points, or 1.87%. Mexico's benchmark
Bolsa Index advanced 58.60 points, or 0.31%, while Argentina's Merval Index
rallied 20.78 points, or 1.17%.
Brazilian issues continued to benefit from yesterday's announcement of
market-friendly Sao Paulo Governor Geraldo Alckmin as the presidential
candidate representing the Social Democrats. Alckmin will run against
incumbent President Luiz Inacio Lula da Silva, who is expected to seek a
second term in October.
In economic news, the central bank and the treasury said that federal
domestic debt widened 2.6% in February, surpassing 1 trillion reais for the
first time ever. The most recent result follows January's debt level of 984.9
billion reais.
On the corporate front, utility Tractebel said that its fourth-quarter
profit declined, partly due to a substantial tax write-off a year ago that
wasn't repeated in the most recent quarter. The firm's net profit arrived at
220.1 million reais, down 8.8% from 241.3 million reais a year earlier.
However, for the full year, the firm's profit jumped 19% to 920 million reais
from 775 million reais in 2004.
Mining titan CVRD said that continued global economic growth, particularly
in China, will maintain a shortage of iron ore supply. Separately, the firm
said that it will not give up its preferential right to excess iron ore from a
mine owned by CSN without being compensated.
In brokerage news, a major investment bank removed power utility Energias
from its Latin American equity model portfolio due to its "very strong
performance" since October. The broker replaced the firm with telecom firm
Telemar.
Mexican issues built on strength in the U.S. markets, which were aided by
a strong Beige Book report that indicated steady economic growth and few
inflationary pressures.
Meanwhile, Mexico's Federal Competition Commission announced last night
that it has fined Femsa 2.8 million pesos for not providing information
regarding its investigation concerning possible anti-competitive practices in
beer distribution.
Argentina managed solid gains today, amid relatively low volume and a
light news flow. Among the day's winners were Petrobras Energia
Participaciones and Siderar.
-- Linda.Shea@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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