Monday, June 19, 2006, 4:45 PM EST (Thomson Financial): Latin American
shares moved lower amid significant losses in both Brazil and Mexico.
Investors remained attentive to volatility as doubts lingered about the
trajectory of monetary policy in the U.S. Argentine markets were closed
today in observance of Flag Day.
Brazil's Bovespa Index lost 501.57 points or 1.46%. Mexico's benchmark
Bolsa was down 459.91 points, or 2.55%.
Brazilian shares slid lower as investors continue to question where
U.S. interest rates are headed over the next few months. Trading was also
dented by an options expiry scheduled for the session.
On the economic front, the Ministry of Trade and Development said that
Brazil posted a US$654 million foreign trade surplus in the June 12-to-18
period, bringing the trade surplus for the year to date to US$17.429
billion. The most recent result is slightly lower than last year's
US$17.895 billion.
Meanwhile, the Brazilian Census Bureau, or IBGE, reported that retail
sales volume rose a seasonally adjusted 1.52% in April compared to a month
prior. The most recent result was also above the average analyst estimate,
as polled by the Estado news agency.
In Mexico, stocks were lower following a rally late last week that
helped slow nearly a month of heavy losses. Mexican shares fell alongside
declines in the U.S., a major trading partner.
The IPC, along with other emerging-market bourses, has suffered from
the heavy selloff of the past month as investors priced in the likelihood
of U.S. interest rates rising. But last week the IPC pulled out a rally
despite a higher-than-expected pickup in core inflation in the U.S. that
reinforced expectations of a rate increase by the Federal Reserve at its
next Federal Open Market Committee June 28-29 later this month.
Traders took advantage of the heavy selloff in Mexican equities in May
and early June to go bargain hunting for blue chips.
Shares of Mexico's top retailer, Wal-Mart de Mexico, were lower. A
major investment bank added Walmex to its equity model portfolio, staying
overweight in Mexico because of its attractive valuations.
Elsewhere, shares of cement maker Cemex were slipped. Cemex said it
expects second-quarter earnings before interest, taxes, depreciation and
amortization to rise 14% from a year ago.
ICA Fluor, a joint-venture of ICA and Fluor Corp., said it won a US$108
million contract to expand and revamp a petrochemical plant owned by a unit
of conglomerate Alfa SA.
-- 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
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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