Monday, March 27, 4:45 PM EST (Thomson Financial): Latin American stocks
were mixed, with Brazilian stocks edging higher amid news that Brazil's
embattled finance minister has submitted his resignation. Gains may have been
limited somewhat by caution ahead of the U.S. Federal Reserve's interest-rate
decision tomorrow.
Brazil's Bovespa Index added 64.01 points, or 0.17%. Mexico's benchmark
Bolsa Index slipped 112.98 points, or 0.58%, while Argentina's Merval Index
climbed 22.32 points, or 1.24%.
Brazilian stocks posted modest gains, as investors digested news that
Finance Minister Antonio Palocci submitted a letter of resignation to
President Luiz Inacio Lula da Silva today following weeks of allegations tying
to him to campaign finance scandals and corruption. "Minister Antonio Palocci
decided to ask the President of the Republic for leave from his post. The
minister is delivering President Lula a letter explaining his reasons," the
Finance Ministry said. The ministry added, however, that Lula could reject
Palocci's resignation or grant him a temporary leave from his post. Lula has
said in recent weeks that he would not accept a resignation from Palocci.
Meanwhile, a local television network reported that Lula was considering
naming BNDES National Development Bank President Guido Mantega to replace
Palocci in the event he accepted the resignation.
In corporate news, a British newspaper reported over the weekend that
Mittal Steel and Arcelor were both trying to acquire Brazilian steel maker
CSN, which is said to be worth up to US$10 billion. Shares of CSN soared today
on the take-over speculation.
Mining giant CVRD announced late Friday that it has completed an expansion
of its alumina refinery in northern Brazil's Para state. As such, the
company's alumina production will rise to 4.4 million metric tons per year
from 2.5 million.
Supermarket chain CBD said it will make capital investments of 935 million
reais in 2006. That is up from last year's capital investments of 842.3
million reais.
Mexican shares pulled back today, alongside declines in the U.S., as all
eyes are focused on the U.S. Federal Reserve's decision on interest rates and
policy statement, due out tomorrow. Last week, the Bank of Mexico cut interest
rates for the eighth time in eight months.
In corporate news, a strike at Grupo Mexico's La Caridad copper mine in
northern Mexico entered its fourth day today. Approximately 1,000 employees
stopped working today, after negotiations over a contract revision failed.
Elsewhere, Pemex predicts it will earn more than US$9 billion from oil
exports in the first quarter of this year, which is 60% above that earned in
the corresponding quarter a year ago.
Late last Friday, banking firm Grupo Bimbo SA said that it will purchase
the Chinese unit of Spain's Panrico SA for 9.2 million euros. The deal is
expected to close within three months.
Argentine issues rallied on the day, bolstered by Banco Macro Bansud. The
firm's underlying shares received support from the strong debut of its
American Depositary Receipts on the New York Stock Exchange. Investors gave a
strong showing today, after Argentine markets were closed Friday to
commemorate the 30th anniversary of the country's military coup.
-- 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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