Friday, March 24, 4:45 PM EST (Thomson Financial): Latin American stocks
posted modest gains, with Brazilian shares getting a boost from tame inflation
data and news of a potential stock split at CVRD. Meanwhile, upbeat GDP data
and reassuring comments from the Bank of Mexico buoyed Mexican issues.
Argentina's market was closed.
Brazil's Bovespa Index added 103.20 points, or 0.28%, while Mexico's
benchmark Bolsa Index rose 83.43 points, or 0.43%.
Brazilian stocks edged cautiously higher, as buyers nibbled on recently
beaten down shares, amid continued concerns about rising U.S. interest rates
ahead of next week's Federal Reserve meeting. Investors are anxiously awaiting
the Fed's statement that will accompany its anticipated rate hike on Tuesday
for any indication of how much longer the current U.S. monetary tightening
cycle will last.
In local economic news, Brazil's inflation as measured by the IPCA-15
index decelerated to 0.37% in the February 11 to March 14 period, from 0.52%
in the January 14 to February 10 period, IBGE said.
Also, Brazil's Central Bank said it expects the country's inflation rate
to end 2006 and 2007 close to the goal of 4.5%. "It is expected that inflation
will be very close to the goal of 4.5% for 2006 and 2007," the bank said.
In corporate news, investors reacted positively to reports that mining
giant Companhia Vale do Rio Doce's board of directors approved a 2-for-1 stock
split proposal aimed at maintaining the liquidity of its shares. CVRD said the
proposal still has to be approved at a meeting of shareholders.
Meanwhile, Standard & Poor's Rating Services said it raised its foreign
and local currency corporate credit ratings on media group Globo Comunicacao e
Participacoes S.A. (Globo) to 'BB-' from 'B+'. The outlook on the ratings is
stable. "The rating action was prompted by the significant improvement of
Globo's financial risk profile since the conclusion of its debt restructuring
in mid-2005," S&P said.
In other corporate news, a major investment bank downgraded wireless
provider Telemig Celular Participacoes SA to "underweight" from "equalweight,"
citing a deterioration in margins in the company's fourth-quarter results.
Mexican shares recouped some of yesterday's losses, which stemmed from
profit-taking following a recent rally in the IPC index. In economic
headlines, as expected, the Bank of Mexico eased monetary policy for the
eighth time in so many months. The central bank reduced rates by 25 basis
points to 7.25% and said it expects inflation to continue its recent downward
trend.
Elsewhere, the National Statistics Institute, or Inegi, said that the
economy grew 5.7% in January from a year ago, thanks to gains in industrial
and agricultural production and services. The global indicator of economic
activity, or IGAE, advanced 1.96% from December on a seasonally-adjusted
basis.
In corporate news, local news reports said that a group of 45 senators
will support a new radio and television law that should benefit Televisa. The
bill has been criticized as being overly favorable for Televisa, Mexico's
leading broadcaster.
-- 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
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SOURCE Thomson Financial Corporate Group
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