Tuesday, June 6, 2006, 4:45 PM EST (Thomson Financial): Latin American
shares fell on concerns that the U.S. Federal Reserve may continue to raise
interest rates after hawkish comments by Fed Chairman Ben Bernanke on
Monday. Bernanke warned that the Fed must be vigilant to ensure inflation
remains in check, even if economic growth starts to slow.
Brazil's Bovespa Index dropped 182.06 points, or 0.50%. Mexico's
benchmark Bolsa Index fell 156.64 points, or 0.83%, while Argentina's
Merval Index lost 5.44 points, or 0.33%.
Brazilian stocks ended the session lower amid continued worries that
the U.S. Federal Reserve will extend its monetary tightening cycle longer
than previously expected. Shares were also pressured by disappointing local
economic data. Official data released today showed that industrial
production in Brazil held steady in April from March and fell a surprising
1.9% from April 2005.
Meanwhile, motor vehicle production and exports reached their
highest-ever levels in May as automakers took advantage of seasonal
factors, the Brazilian Motor Vehicle Manufacturers Association, or Anfavea,
reported. Auto production for the month reached 245,179 units, up 20.1%
from April. May was the single- best production month ever for Brazilian
automakers, representing an increase of 10.4% against May 2005.
Elsewhere, Mexican shares continued their decline, with losses spread
across nearly every industry. Shares of wireless phone company America
Movil gave up early gains following Deutsche Bank's upgrade of its shares
to "buy" from "hold". Shares of fixed-line phone company Telmex declined,
as did those of copper miner Grupo Mexico. Shares of Mexico's largest
retailer, Wal-Mart de Mexico, saw a substantial decline as well.
Shares of cement maker Cemex were also down following an announcement
late Monday that 97.4% of shareholders had received new shares in lieu of
cash as part of the company's dividend program, resulting in the issuance
of 105.9 million CPOs.
Elsewhere, Argentina's Merval Index was lower, extending Monday's 2.5%
loss.
In corporate news, shares of Quilmes Industrial SA, the country's
largest brewer, declined as an analyst questioned the stock's strength and
downgraded its rating. On April 13, InBev SA, the world's biggest beer
producer, paid $1.2 billion to raise its stake in Luxembourg-based Quilmes
Industrial, which is also the largest brewer in Bolivia, Paraguay and
Uruguay. InBev brews the Belgian lager Stella Artois and Germany's Beck's
and was formed in August 2004 when Belgium's Interbrew combined with Latin
America's major brewer AmBev in an US$11.4 billion deal.
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
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