Wednesday, April 5, 4:45 PM EDT (Thomson Financial): Latin American stocks
advanced, with Brazilian stocks getting a boost from better-than-expected
inflation data, while Mexican shares rose on optimism about the upcoming
earnings season at home and in the U.S.
Brazil's Bovespa Index added 250.94 points, or 0.65%. Mexico's benchmark
Bolsa Index gained 166.55 points, or 0.84%, while Argentina's Merval Index
jumped 29.43 points, or 1.62%.
Brazilian stocks climbed as tame inflation data added to expectations that
the Brazilian central bank will continue, or perhaps accelerate, its interest-
rate cutting campaign. The Fipe research foundation said its Sao Paulo
consumer price index rose 0.14% in March after dipping 0.03% in February.
However, the March rise was below market expectations for inflation between
0.15% and 0.30%. The official IPCA inflation index for March is due for
release on Friday.
In corporate news, petrochemical company Braskem said it had purchased
local polyethylene company Politeno
Industria e Comercio SA, with an initial payment of US$111.3 million.
Brasil Telecom Participacoes was in focus after Telecom Italia said it is
continuing talks with the controllers of the fixed-line carrier over the
possible purchase of a further stake.
A major investment bank upgraded Embratel to "neutral" from "reduce,"
saying it sees some upside for the stock after a 26% slide this year.
Meanwhile, another investment bank reduced its price target for Telemig
Celular to 6.30 reais from 7.75 reais. "TMB is implicitly for sale, and our
target is driven by the price we think a strategic buyer will be willing to
pay for the nonvoting TMB shares, above and beyond the necessary control
price," the bank said.
Mexican stocks continued to power higher today, with the IPC Index once
again hitting fresh record highs. Investors appear to be optimistic about
earnings season both in Mexico and the U.S.
Conglomerate Alfa SA said that its auto parts unit Nemak intends to build
a production facility in China, partly due to the "expected growth rate of the
market and the increasing presence of our customers in the region."
Meanwhile, the government is set to sell its airline firm, Aeromexico,
through a bidding process rather than through a stock offering. The target
date to complete the sale is the end of the third quarter.
Argentine issues also took part in the broader regional upswing today,
with shares hitting a fresh high. The benchmark Merval Index was strongly
aided by heavyweight Tenaris, which rallied on the day alongside rising crude
oil prices.
In economic news, the national statistics agency, or Indec, announced that
the consumer price index rose 1.2% in March from February, slightly above
analyst expectations. Nevertheless, the inflation rate for the 12 months since
March 2005 was 11.1%, down from 11.5% in February.
-- 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
Financial, please visit our web site at http://www.thomsonfinancial.com.
SOURCE Thomson Financial Corporate Group
back to top
