Friday, April 28, 4:45 PM EDT (Thomson Financial): Latin American
stocks rallied, with Brazilian shares getting a boost from investor relief
that U.S. economic growth data did not appear to worsen the outlook for
U.S. interest rates. Mexican issues gained amid a flood of earnings reports
from local companies.
Brazil's Bovespa Index jumped 611.98 points, or 1.54%, while Mexico's
benchmark Bolsa Index climbed 255.57 points, or 1.25%, and Argentina's
Merval Index surged 39.36 points, or 2.11%.
Brazilian stocks posted solid gains, as a smaller-than-expected rise in
U.S. gross domestic product in the first quarter helped to ease fears that
the U.S. Federal Reserve will raise interest rates more than anticipated.
Higher U.S. rates tend to draw investment away from emerging markets like
Brazil.
In corporate news, oil giant Petroleo Brasileiro SA said it completed
the purchase of Royal Dutch Shell distribution and retail assets in
Colombia.
Brazilian electric-power holding company Energias do Brasil SA posted
late yesterday a three-fold increase in its first-quarter earnings.
CVRD shareholders approved the company's 2-for-1 stock split proposal.
Shareholders of record May 19 will receive two shares for each common or
preferred Class A share on May 22. Holders of CVRD's ADRs will also receive
an additional share for each share held.
On the economic front, Brazilian Central Bank President Henrique
Meirelles said that Brazil's fight against inflation was not over. "People
tell me that interest rates are still high and I tell them that I agree.
But the central bank must make monetary policy in light of overall economic
conditions," he said.
Mexican issues regained their record-breaking title, as shares surged
today following yesterday's bout of profit-taking. Strong corporate reports
helped propel Mexico higher on the day. Grupo Mexico strongly advanced on
word it may sell its majority stake in Southern Copper Corp.
Femsa's first-quarter net profit jumped to 1.10 billion pesos from
756.0 million pesos a year earlier, while revenue advanced 15% to 27.53
billion pesos.
Elsewhere in earnings, Arca advanced, after the soft-drink bottler
posted a 20% jump in its first-quarter net profit to 406.3 million pesos
from 338.6 million pesos last year. Sales rose 12% to 3.36 billion pesos.
The firm's operating profit surged 40.5% to 633.2 million, while Ebitda
reached 807.1 million pesos, a 30.6% gain from a year ago.
Brewer Grupo Modelo said that higher sales and operating gains
bolstered its first-quarter results. The brewer saw net profit climb to 1.9
billion pesos from 1.57 billion pesos a year ago. Sales advanced 12% to
12.45 billion pesos, while Ebitda rose 14.2% to 4.15 billion pesos
year-over-year.
Within the telecom group, a major investment bank upgraded Telmex to
"buy" from "hold." Last night, the firm posted a 12.8% rise in its
first-quarter net profit to 7.59 billion pesos; although, sales slipped
0.4% to 41.56 billion pesos. Ebitda edged down 2.8% to 18.82 billion pesos.
Turning to financials, banking group Grupo Financiero Inbursa said that
weak results at its banking unit pressured its first quarter results. The
firm's net profit arrived at 1.04 billion pesos, down from last year's 1.36
billion pesos.
Grupo Televisa SA said that higher sales and lower financing costs
helped to more than double its first-quarter net profit to 1.29 billion
pesos when compared to a year ago. Sales rose 13.3% to 7.46 billion pesos
on a 28% advance in operating profit to 2.18 billion pesos.
Argentina took part in the broader market rebound, following three-
straight days of declines. Brazilian state-run oil firm Petrobras, which
debuted on the local Argentine exchange yesterday, helped boost local
issues.
In economic news, the national statistics agency, or INDEC, said that
industrial production rose 7.2% in March compared to the year-ago result.
-- 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 Services
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