• Categories
  • Archives

Cabinet Changes in Brazil Don’t Stop Market’s Bleeding

Latin American shares witnessed another mixed session Wednesday, with shares following a similar pattern to Tuesday’s trend. Brazilian shares continued to suffer amid the latest developments in the alleged government bribery scheme.

Argentine issues also took a tumble amid inflation concerns. Meanwhile, Mexican issues managed impressive gains despite a steep fall in the U.S. markets amid surging oil prices.


Brazil’s benchmark Bovespa Index declined 157.91 points, or 0.64%, while Mexico’s benchmark Bolsa Index advanced 141.68 points, or 1.04%. Argentina’s Merval Index tumbled 25.86 points, or 1.87%.


Brazilian issues continued to trend lower, as political jitters shadow the region. Also, a surge in crude oil prices, which topped US$ 61 a barrel, pressured Brazil, which is a net importer of oil.


Crude prices received support from tropical storms in the Gulf of Mexico, which forced the closure of several oil and gas rigs. Investors are already concerned about U.S. supplies meeting demand.



Amid the unfolding political scandal, key witness Marcos Valério provided testimony before a congressional committee. Valério was implicated in the alleged bribery scheme. Also, Brazilian parties agreed to create a special committee to fully investigate the bribery allegations.


The investigation will commence in 30 days and last for 120 days. Separately, President Luiz Inácio Lula da Silva replaced three government ministers in a bid to strengthen support in Congress. Two of the seats were given to members of the Democratic Movement Party, which is an ally of the governing Workers Party.


Turning to economic news, the national automakers association, Anfavea, said that Brazilian motor vehicle sales leapt 3.9% in June from the prior month and auto production climbed 0.4%.


Sales surged 15% from the year-ago period. Sales of flexfuel cars, which run on both ethanol and gasoline, surpassed sales of all other vehicles combined for the first time.


On the corporate front, airline Varig said that it has reorganized its management team in order to separate the firm’s operations from its financial restructuring. Varig filed for protection from creditors on June 17.


Elsewhere, iron ore miner CVRD is set to pay US$ 1.2 billion to develop a nickel mine. The mine should have capacity to produce approximately 46,000 tons per year of nickel and 2,800 tons per year of cobalt.


Mexican shares continued to power higher, despite steep declines in U.S. shares amid surging crude oil prices. Mexico exports oil to the U.S.


Airport group Asur announced that passenger traffic at the nine airports that it manages rose a little more than 8% in June, compared with the year-earlier period.


Separately, airline holding firm Cintra SA commenced soliciting letters of interest from potential buyers for AeroMexico or Mexicana. Cintra will notify firms by August 9 to let them know if they qualify to participate in the privatization process.


Argentine shares tumbled yesterday, following yesterday’s indication of higher inflation. Sebastian Katz, subsecretary of economic programming, said that the local government will try to negotiate new pricing agreements for food products to help curtail inflation.
 
It was reported that the Consumer Price Index advanced at a much stronger-than-expected clip in June.


In corporate reports, Spanish-Argentine energy firm Repsol YPF SA intends to acquire a 20% stake in a company that expects to export liquefied natural gas from Peru.


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

A Brazil-Syria Trading Bridge

Global Guiders, a trading company from the southeastern Brazilian state of Rio de Janeiro, ...

Low Inflation in US Boosts Brazilian Market

Brazilian and Latin American markets leapt along with U.S. shares, after tame U.S. CPI ...

Brazil’s Dedini, a World Reference on Ethanol Technology

While pumps in gas stations worldwide churn out gasoline containing increasingly higher doses of ...

6 Million Brazilians Work as Maid

The precarious working conditions of domestic workers in Brazil are being discussed today in ...

As Walking Metamorphosis Brazil’s Lula Has Become Target for Left and Right

The long interview given by Brazilian President Lula to O Estado de S. Paulo ...

Sudan

Darfur – Brazil’s African Side Show

President Luiz Inácio Lula da Silva has made Africa an important part of his ...

Stuttering Start

All is not as rosy as financial markets would have us believe. Congress practically ...

Brazil Starts Emergency Program to Save Indian Kids

The United Nations Children’s Fund (Unicef) wants to provide indigenous tribes, in the South ...