Wednesday, March 22, 4:45 PM EST (Thomson Financial): Latin American
stocks were mixed, with Brazilian shares climbing on bargain hunting following
recent losses stemming from concerns about rising U.S. interest rates.
Meanwhile, Argentine issues dropped after the country's central bank cautioned
that it could more closely monitor the simultaneous buying and selling of
securities.
Brazil's Bovespa Index jumped 452.58 points, or 1.21%. Mexico's benchmark
Bolsa Index inched up 16.99 points, or 0.09%, while Argentina's Merval Index
fell 13.07 points, or 0.72%.
Brazilian stocks sank, as investors went in search of bargains following
the market's steep drop yesterday on concerns about rising U.S. Treasury
yields and worries the U.S. Federal Reserve will continue its monetary
tightening campaign longer than expected.
Shares have also been pressured recently by renewed political corruption
worries. In testimony before a congressional investigative committee,
witnesses recently linked Finance Minister Antonio Palocci to an alleged ring
of lobbyists and political party leaders accused of bribery and campaign-
finance violations. Opposition leaders have been calling for his resignation.
Meanwhile, Palocci has repeatedly denied any involvement in the alleged
scandals. Earlier this week President Luiz Inacio Lula da Silva defended
Palocci, saying he will stay on as finance minister.
In corporate news, oil giant Petrobras said it rejected a recent claim by
Rio de Janeiro state that it owes the state government 800 million reais in
special royalty arrears.
Telecom firm Telemar was in focus after the Brazilian securities
commission (CVM) said it has approved an issue of non-convertible debentures
worth 2.16 billion reais by Telemar. Last month, the company announced its
intention to issue a debenture totaling just 1.6 billion reais, but it later
decided to increase the offer due to strong demand.
Mexican shares managed to squeeze out small gains on the day toward the
end of the session, coming back from intra-day losses. The market was closed
yesterday for a holiday. Profit-taking was in full swing early on during
today's session, as the key IPC index has seen a string of consecutive gains,
including two-straight record breaking sessions. Positive U.S. trading aided
Mexico's turnaround, as did strong domestic retail sales.
Meanwhile, investors are expecting the Bank of Mexico to continue to ease
interest rates this coming Friday. Today, the National Statistics Institute,
or Inegi, announced that retail sales grew 3% in January from a year ago and
were up 2.04% from December on a seasonally-adjusted basis.
Argentina moved lower, despite some strong economic indicators in the form
of the GDP and current account surplus. Investors instead focused on a warning
from the central bank that it could monitor the simultaneous buying and
selling of securities more closely.
On the economic front, the national statistics agency, or INDEC, said that
the current account surplus for the fourth quarter of last year came in at
US$1.482 billion, bringing the surplus for full-year 2005 to US$5.407 billion.
Elsewhere, INDEC said that January's gross domestic product rose 9.1% from
a year ago and was unchanged from December 2005. The year-over-year growth
rate came in well above analyst expectations.
State-owned bank Banco de la Nacion SA announced that its past-due debts
declined by 58% in 2005 to 988 million pesos. As of December 31, the bank's
total assets are 46.03 billion pesos, of which 2% account for past-due debts.
-- 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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