Wednesday, May 31, 2006, 4:45 PM EDT (Thomson Financial): Shares in
Brazil were up sharply on strong economic data; however, Mexican stocks
extended yesterday's losses. Meanwhile, several Argentinean banks received
upgrades from Moody's on improving fundamentals.
Brazil's Bovespa Index added 117.53, or 0.32%. Mexico's benchmark Bolsa
Index fell 163.42, or 0.87%, while Argentina's Merval Index gained 15.71,
or 0.96%
Brazilian stocks posted solid gains on pleasing economic data. Brazil's
Census Bureau reported that Brazil's first-quarter economic growth was
greater than expected due to a recovery in industry and services on
increased domestic consumption. First-quarter GDP rose 3.4% compared with
the year-earlier period, which was faster than the 1.4% expansion in the
fourth quarter and above the 2.7% median estimate of economists polled by
Dow Jones Newswires.
In corporate news, shares of Brazilian mining giant Companhia Vale do
Rio Doce, or CVRD, declined after China's Xinhua news agency said local
steelmakers rejected a 19% hike in iron ore prices. Shares were down on the
Bovespa. But CVRD denied reports that it had halted iron ore shipments to
China due to the dispute over 2006 price contract negotiations. "Iron ore
shipments to China are normal," a CVRD spokeswoman said. Shares ended the
session higher.
In sector action, Brazilian energy stocks were among the advancers,
with Petrobras, Cesp, Electropaulo and Cemig all rising. Banking shares
were also higher, with Itau, Bradesco and Unibanco all posting gains.
Elsewhere, heavyweight telecom Telemar also advanced.
After meeting Brazilian President Luiz Inacio Lula da Silva in Brazil,
European Commission President Jose Manuel Barroso said a breakthrough in
the stalled Doha round of World Trade Organization multilateral trade talks
may be at hand. "There are economic reasons prompting us to defend
vigorously that there will be a compromise. We are possibly close to
reaching a deal in the Doha round," Barroso said in televised remarks.
Elsewhere, Mexico gave up early session gains to end lower following
yesterday's drubbing. The benchmark IPC index had tumbled more than 650
points Tuesday, as selling resumed across emerging markets and in the U.S.
on fears of higher global interest rates.
Soft-drink bottler Arca was in focus after Deutsche Bank raised it from
"hold" to "buy." Last week, the company called off plans to buy a stake in
processed-food concern Grupo Herdez SA, and Deutsche Bank said the outlook
for Arca's dividend distribution has improved.
Lending support to Argentina's market, several Argentine banks were
upgraded by Moody's Investors Service to reflect the banks' improving
financial fundamentals and the recovery of the banking system since the
financial crisis of 2001-2002. Moody's upgraded Banco Rio de la Plata S.A.,
BBVA Banco Frances S.A., Banco Credicoop Cooperativo Limitado and Banco de
Valores S.A to D- from E. The outlooks on these ratings are stable.
-- Michael.O'Brien@contractor.thomson.com
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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