Tuesday, April 4, 4:45 PM EDT (Thomson Financial): Latin American stocks
gained ground, with Brazilian and Mexican shares getting a boost from upbeat
local economic data. Strength on Wall Street amid optimism about U.S. earnings
also fueled buying interest.
Brazil's Bovespa Index added 85.19 points, or 0.22%. Mexico's benchmark
Bolsa Index climbed 129.87 points, or 0.66%, while Argentina's Merval Index
jumped 20.94 points, or 1.16%.
Brazilian stocks edged up, as upbeat industrial production figures added
to optimism about the economy's outlook. The Brazilian Census Bureau reported
today that Brazil's industrial output rose a seasonally adjusted 1.2% in
February from January. Analysts' forecasts had ranged from a decline of 0.60%
to growth of 0.90%. Output jumped 5.4% in February from the same month a year
ago. Some analysts viewed February's strong industrial output as a positive
sign for Brazil's gross domestic product this year.
Shares were also supported by growing confidence that the new finance
minister Guido Mantega will continue the market-friendly economic policies of
his predecessor Antonio Palocci. Since his appointment last week, Mantega has
repeatedly pledged to maintain fiscal and monetary austerity policies,
reassuring investors that Brazil's economy will continue to grow amid a
climate of gradually falling interest rates and low inflation.
In corporate news, oil giant Petrobras' board approved a 2006 capital
budget of 26.2 billion reais at a general assembly. Petrobras earmarked 21.2
billion reais for direct investments, with 66% of the funds allocated to oil
and natural gas. The company is working towards Brazil's long-running goal of
becoming a net exporter of crude in 2006.
Meanwhile, an influential investment bank started coverage of airline TAM
with an "outperform" rating on its American Depositary Receipts. "We rate the
shares outperform relative to our EM (emerging market) universe due to
leverage from a strong macro backdrop, its dominant share in an oligopolistic
market and valuation," the bank said.
Mexico witnessed another record-breaking session, alongside soaring
consumer confidence. Enthusiasm for U.S. shares, amid optimism for first-
quarter earnings, also lent power to Mexico.
On the economic front, the National Statistics Institute, or Inegi, said
that Mexico's consumer confidence rose to its highest level in nearly five
years this past March to 112.4 from 108.1 in February. The most recent figure
compared to 105.7 in the corresponding period a year ago.
Home builder Ara intends to pay dividends and propose a stock split at its
shareholder meeting on April 20. Ara will propose a dividend of 3.80 pesos a
share.
A major investment bank issued a note on retailer Walmex. The brokerage
expects the firm will post same-store sales growth of about 1% in March, as
there will likely be a negative impact from Easter falling in April this year,
compared to March last year.
Argentine shares strongly rebounded today, after recent lackluster
trading. Meanwhile, local reports speculated that the presidents of Argentina
and Uruguay may meet this week with the aim of ending tensions regarding pulp
mills being built on the Uruguayan side of a river bordering the two
countries.
-- 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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