Tuesday, May 2, 4:45 PM EDT (Thomson Financial): Latin American stocks
bounced higher, after a long holiday weekend. Yesterday, Brazilian, Mexican
and Argentinean markets were closed for the May Day holiday. Investors
chose to ignore Bolivia's surprise decision to nationalize its oil and gas
industry, which could impact select firms with interests in the country, as
well as markets that import oil and gas from Bolivia.
Brazil's Bovespa Index surged 653.16 points, or 1.62%. Mexico's
benchmark Bolsa Index advanced 433.68 points, or 2.10%, while Argentina's
Merval Index edged up 1.19 points, or 0.06%.
Brazilian shares leapt past the 41,000 mark and reached a record high
today, thanks to foreign investor inflows. Investors shrugged off concerns
regarding Bolivia's move to nationalize its oil and gas industries, which
will entail foreign firms signing new contracts. Brazil receives 50% of its
natural gas from Bolivia, and Petrobras, Brazil's state-run energy firm, is
a major investor in Bolivia where it operates two refineries.
In upbeat economic reports, the Ministry of Development, Industry and
Foreign Trade said that the country posted a foreign trade surplus of
US$3.1 billion in April, boosting the surplus so far this year to US$12.44
billion.
Turning to the financial sector, Banco Itau rallied, after the company
confirmed that it will buy the Brazilian assets of BankBoston. Banco Itau
also has the exclusive rights to buy the firm's operations in Chile and
Uruguay.
Separately, a major investment firm downgraded Banco Do Brasil to "peer
perform" from "outperform" due to the stock price's recent appreciation.
Mexican shares traded similarly to Brazil, reaching record highs on the
day. Investors are anticipating strong quarterly earnings from America
Movil, which is due out this evening.
Copper mining firm Grupo Mexico edged higher. This past weekend,
workers at the firm's lead and zinc mine in Taxco ended a week-old strike;
although, strikes at its copper mine La Caridad and zinc mine in Zacatecas
state continued.
Elsewhere in the sector, Industrias Penoles said that stronger metals
production and higher prices helped the firm to double its first-quarter
net profit to 1.14 billion pesos from 567.9 million pesos a year ago. Sales
surged to 6.92 billion pesos from 5.09 billion pesos.
ICA said that its first-quarter net profit surged, partly due to its
increased stake in GACN. The engineering and construction firm's profit
rose to 130.9 million pesos from 70 million pesos in the year-earlier
period. Sales advanced 11% to 4.62 billion pesos, and operating profit
leapt 72% to 354.4 million pesos.
Argentine issues did not partake in the broader regional rally, but
instead settled for a slight uptick. Investors are awaiting the kick-off to
the country's own earnings season, which is not set to begin until next
week.
-- Linda.Shea@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
