Thursday, June 15, 2006, 4:45 PM EST (Thomson Financial): Latin
American shares continued to rebound today as investors returned to
emerging markets after a one-month selloff and on reassuring comments from
U.S. Federal Reserve chairman Ben Bernanke about the inflation outlook.
Brazilian markets were closed for a holiday.
Mexico's benchmark Bolsa Index picked up 1279.18 points, or 7.68%,
while Argentina's Merval Index rose 67.37 points, or 4.46%.
Brazilian local markets were closed today for a national holiday, but
Brazilian ADRs had a good day in New York, where shares of state-controlled
oil company Petrobras and mining giant CVRD rose, along with telecom
Telemar.
In Mexico, shares posted their biggest one-day gain in six years,
alongside triple-digit gains in the U.S.
The IPC, along with other emerging-market bourses, was reeling from
heavy selling over the past month on investor anxiety over the outlook for
U.S. interest rates, inflation and prospects for economic slowdown. The
recent gains on the IPC come despite a bigger-than-expected pickup in core
inflation in the U.S., which reinforced expectations of a rate increase by
the Federal Reserve later this month.
Locally, investors are increasingly turning an eye to the July 2
presidential elections, with recent polls showing left-wing candidate
Andres Manuel Lopez Obrador in a statistical tie with conservative Felipe
Calderon.
On Wednesday, UBS raised its recommendation on Walmex shares to buy
from neutral, viewing "recent weakness as a buying opportunity." Walmex
shares continued to surge in trading today.
Argentine shares ended higher today, in concert with other Latin
American markets and the U.S. rally. Meanwhile, INDEC reported that
first-quarter growth saw strong 8.6% growth from the year-earlier period on
a 24.1% rise in construction and an 8.5% increase in manufacturing. Gross
domestic product climbed 1.2% most recently from the fourth quarter of
2005.
In financials, Bear Stearns initiated coverage of bonds issued by
Argentine electric power firm Empresa Distribuidora y Comercializadora
Norte SA, or Edenor, at outperform on restructuring that could lead to
possible upgrades. The company recently cut its debt about 30% to $376.5
million and defaulted on its debt in September 2002 in the wake of the
national economic meltdown.
-- Michael.O'Brien@contractor.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
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SOURCE Thomson Financial Corporate Group
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