Tuesday, May 9, 4:45 PM EDT (Thomson Financial): Latin American stocks
advanced, with Brazilian shares getting a boost from optimism about local
corporate earnings, while tame domestic inflation data lifted Mexican
issues.
Brazil's Bovespa Index jumped 463.80 points, or 1.12%. Mexico's
benchmark Bolsa Index rose 214.26 points, or 0.99%, while Argentina's
Merval Index added 20.01 points, or 1.07%.
Brazilian shares rallied to an all-time high, as continued upbeat
earnings news added to recent optimism about Brazil's first-quarter
earnings season.
Among the companies reporting today, Banco Itau posted a first-quarter
net profit of 1.460 billion reais, up 28% from 1.141 billion reais a year
ago and in line with expectations.
On a less upbeat note, steelmaker Usinas Siderurgicas de Minas Gerais
said its first-quarter net profit fell 66% to 345 million reads from 1.0
billion reads a year earlier, amid lackluster domestic demand for flat
steel products and a decrease in value of the company's product mix.
In other corporate news, Mexico's Telex asked Brazil's securities
regulator for permission to make a cash tender offer for the outstanding
shares of Brazilian long-distance carrier Embattle. Telex currently holds a
72.3% stake in Embattle.
Meanwhile, investors were looking ahead to the U.S. Federal Reserve's
interest rate decision and accompanying policy statement tomorrow. The Fed
is widely expected to raise interest rates by 25 basis points, but some
investors are hopeful the central bank will signal a pause in its monetary
tightening cycle at future meetings.
Elsewhere, Mexican shares climbed to a new record closing high, as
investors cheered tamed local inflation data. The bank of Mexico reported
that Mexico's consumer price index rose just 0.15% in April, below market
expectations for an increase of 0.18%. That helped bring the annual rate of
inflation down to 3.20% from 3.41% at the end of March.
In other economic data, Mexico's March trade deficit narrowed to US
$147 million from the US $183 million reported previously, helped by
downward revisions in automotive sector imports, the Finance Ministry said.
On the corporate front, shares of Wal-Mart de Mexico rose amid
expectations the retail giant would report upbeat April same-store sales
after the market close.
In addition, a major investment bank raised its year-end price target
for America Movil ADRs to US $41 from US $38, citing the company's
first-quarter results.
Argentine issues posted solid gains, helped by strength in the shares
of Merval heavyweight Tenaris amid rising oil prices. In analyst actions,
an influential investment bank started coverage of Banco Macro at
"neutral," saying the Argentine bank's shares have already risen rise
sharply since the debut of its ADRs.
-- 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
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SOURCE Thomson Financial Corporate Group
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