Monday, June 26, 2006, 4:45 PM EST (Thomson Financial): Latin American
shares ebbed, as Brazilian investors concentrated on Thursday's U.S.
interest rate decision, while Mexico faltered ahead of its own tight
presidential election this weekend. Argentina managed a rally, although
trading volume was thin.
Brazil's Bovespa Index receded 29.98 points, or 0.09%. Mexico's
benchmark Bolsa declined 54.33 points, or 0.29%, while Argentina's Merval
Index rallied 32.03 points, or 2.02%.
Brazilian shares edged lower today in what is expected to be a cautious
week ahead of Thursday's U.S. FOMC meeting on interest rates. In local
economic reports, the Ministry of Trade and Development said the country
posted a US $515 million foreign trade surplus in the fourth week of June,
down from US $654 million the prior week. The year-to-date surplus now sits
at US $17.944 billion, below the US $18.970 billion tallied in the year-ago
period.
On the M&A front, steelmaker Arcelor Brasil was active, after its
parent firm Arcelor agreed to merge with Mittal Steel, a Dutch-based firm.
Mittal sweetened its bid for Arcelor to US $33 billion, and will control
43.6% of the combined firm.
Mexican issues also dipped on the day; although, the country's own
presidential elections this Sunday likely eclipsed concerns about U.S.
interest rates.
Mining firms received a boost on major M&A activity. U.S. copper giant
Phelps Dodge announced an agreement worth about US $40 billion for two
Canadian mining companies, Inco and Falconbridge. If the deal is completed,
it would create the largest mining firm based in North America.
Closer to home, Grupo Mexico intends to challenge an antitrust ruling
that blocks the merger of its Ferromex rail firm with Ferrosur.
Argentine issues bucked the broader downward trend, instead opting to
rally. Tenaris, which accounts for about a quarter of the Merval index, was
boosted by a jump in crude oil prices.
In economic reports, industrial production jumped 7.3% in May from a
year ago, according the national statistics agency, Indec. Production
advanced 0.9% on a monthly basis.
-- Linda.Shea@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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