Benchmark Rate Goes Up 8th Time in a Row in Brazil

    Latin American equities leapt on the session, although trading was somewhat lighter, as Brazilian markets were closed for a holiday. Mexican shares were supported by a U.S. rally in which the Dow Industrials posted their biggest gains in nearly two years.

    Upbeat financial reports also bolstered Mexican issues. Argentina moved higher on the prospect of an IMF deal. Mexico’s benchmark Bolsa Index jumped 220.90 points, or 1.87%. Argentina’s Merval Index rallied 45.25 points, or 3.46%.


    Brazilian markets were closed today for a holiday to commemorate Tiradentes, a national hero. Last night, the central bank’s monetary policy committee, or Copom, raised Brazil’s reference Selic rate to an annual 19.50% from 19.25%, marking the eighth-consecutive monthly hike.


    No bias for rates was set going forward. Many market pundits anticipated a hold on rates due to a slowing economy and a decline in price pressures.


    In corporate news, mining firm CVRD said that it expects manganese ferroalloy prices to rebound up to US$1,000 per ton by the third quarter. The firm said that new market entrants had pushed prices down earlier this year, but current price levels of around US$600 per ton won’t be maintained as they are below production costs.


    Elsewhere, Brazil has offered Ecuador’s ousted president, Lucio Gutierrez, asylum. Yesterday, Ecuador’s Congress replaced Gutierrez with his Vice President Alfredo Palacio amid street protests stemming from abuse of power accusations.


    Meanwhile, the Organization of American States gave the new Ecuadorian government 24 hours to explain how Congress justified the removal of Gutierrez.


    Mexican issues bounded higher, following U.S. market increases. Upbeat financial reports also supported the key IPC index. Alfa reported last night that its first-quarter operating profit surged 34% to MXN1.62 billion on a 24% rise in sales to MXN16.71 billion from the corresponding period a year ago.


    EBITDA rose 27% to MXN2.24 billion. The conglomerate said that acquisitions in food and auto parts aided its results. Separately, Alfa said that it expects to complete a sale or spinoff of Hylsamex, its steel unit, long before the end of the year. Hylsamex posted a 46% leap in its first-quarter net income to MXN1.07 billion, bolstered by higher steel prices.


    Broadcaster TV Azteca SA posted a 4% uptick in sales to MXN1.67 billion, compared to MXN1.61 billion in the corresponding period a year ago, aided by U.S. and Mexican economic strength. The firm’s net profit advanced 6% to MXN202.2 million from MXN191.3 million last year. EBITDA was relatively flat, totaling MXN630 million.


    In economic reports, the National Statistics Institute announced that February’s retail sales leapt 3.8% year-over-year, but edged down 0.19% from January’s reading. Also, the year-over-year advance was below the mean analyst expectation.


    Argentina’s market also witnessed a reversal of fortune from yesterday, posting gains on the session. The International Monetary Fund said that it is ready to provide Argentina with a short-term aid agreement if certain criteria are met.


    IMF Managing Director Rodrigo Rato commented that a “very strong (structural) reform program that will make the real sector strengthen for the future” is among the reforms needed for a steady recovery in the region.


    In economic news, the central bank raised its 2005 gross domestic product projection to 6.5% from 6.0%, as expansion rates should be more normalized with long-term growth targets.


    PRNewswire


    Thomson Financial Corporate Group
    www.thomsonfinancial.com

    Tags:

    • Show Comments (0)

    Your email address will not be published. Required fields are marked *

    comment *

    • name *

    • email *

    • website *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Ads

    You May Also Like

    Brazil’s Lula Confesses: I Have No Sins

    Brazilian President Luiz Inácio Lula da Silva said Friday, April 8, in an interview ...

    Weighing money

    Brazil’s Plan to Guarantee 4% Growth in 2009

    Brazil announced a series of measures to stimulate the economy and try to strengthen ...

    Brazil's Amazon Rainforest

    Greenpeace Gets Commitment that Will Slow Down Brazilian Amazon’s Deforestation

    American-based outdoor footwear and apparel maker Timberland announced, this Wednesday, July 29, a policy ...

    Brazilian President Lula

    In His Talks to Obama Brazil’s Lula Will Urge Global Credit Relief

    Talking to reporters before embarking for Washington, Brazilian President Luiz Inácio Lula da Silva ...

    Forget the Hype! Brazil Is No Gay Paradise.

    Cramped in a tiny office above Rio de Janeiro’s central train station, I am ...

    WTO Ministers in Brazil Agree to Talk. But They Don’t Know When

    World Trade ministers meeting in Brazil have agreed that talks on a global pact ...

    Brazil: A Time When Coffee Was King

    Brazil has become so closely identified with coffee that many people believe the plant ...

    UN Envoy in Brazil Assesses How Human Rights Activists Are Treated

    Hina Jilani, special emissary of the United Nations Secretary-General, is arriving in Brazil today ...

    Lula’s Popularity Falls 6% in Brazil

    The 75th survey of Brazil’s National Confederation of Transport (CNT) and the Sensus Institute ...

    Brazil Wants to Reduce Taxes for Foreigners Buying Stocks

    Brazil’s Ministry of Finance is studying a proposal to grant certain tax exemptions to ...