• Categories
  • Archives

Deep in Red, Brazilian and LatAm Markets Sing the Bluest Blues

Brazil's stock exchange Bovespa This past week brought Brazil and Latin America an economic tsunami with the region's markets accumulating massive losses as risk aversion and recession fears contagion from major markets spread to the rest of the world.

Brazil's Bovespa, LatAm's largest market plummeted on Friday 6.9% to 31.481 points, accumulating 13, 5% in the week and 51% so far this year. At the end of last year the Bovespa index stood at 63.886. Country risk closed at 688 points.

The Mexican BMV market plunged 16.41% in the week, 31.78% during October and 42.52% since the beginning of the year. On Friday the main IPC index of LatAm's second largest economy was down 4.61% to 6.978 points, the lowest since June 2006. The country risk reached 604.

Argentina's Merval crashed 26.78% this week, (7.6% on Friday) closing at 890 points the most depressing since 2004.Described as the "blackest" week of trading, the Argentine government's decision to take over private pension funds (an estimated 30 billion US dollars) proved to be the kiss of death for a market already battered by global circumstances.

The worst blow was for banks and financial institutions down 27% in the month and 40% below their book's value. Pension funds manage retirement savings of 9.5 million active Argentines with the 30 billion US dollars funds invested 55% in Argentine bonds and 14% in Merval traded shares from local and foreign banks, mainly Spanish, which also had a negative repercussion on trading in Madrid's stock exchange.

Santander Bank, BBVA and Repsol suffered major impacts in the Madrid market because of their close links with South America. The Madrid market lost 5% on Friday and Santander shares were selling at 6.6 Euros a record low.

Argentina's country risk remains above 1.870 points and the Peso lost 1.85% to the US dollar closing the week at 3.29. Inflation is an additional recurrent factor: official statistics insist the index is one digit; however the private sector and trade unions work on an estimate of 25%.

Meantime in Santiago the local IPSA index was down 2.22% to 2.342 points, having lost in the week 3.7% and 15% during October. In spite of the fact the international price of copper has crashed, (Chile's main export), the country is managing the global panic, although the US dollars closed at 660 pesos a significant leap for one day trading. The country risk of Chile stands at 374 points, 223 above the closing of 2007.

In Peru, the Lima stock exchange market was closed a few minutes after trading begun given the "cut losses and get out" spirit among traders. Although insignificant compared to the rest of the economy the Peruvian budding market has lost 39% in October and 71% since the beginning of 2008. Peru's country risk reached 653 points.

Other regional country risks: Uruguay jumped to 876 on Friday; Colombia, 741; Ecuador 2.819 and Venezuela 1.850 points.

Mercopress

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 Is Celebrating: Pirate PCs Fell from 73% to 48% of All Computers Sold

A new study conducted by Brazil’s IT Data and released by  Abinee (Brazilian Association ...

Brazil’s President-Elect Stays the Course and Keeps Lula’s Finance Minister

Dilma Rousseff, the president-elect, as announced by her press office, has chosen economist Alexandre ...

Brazil’s Next Foreign Minister Sees the US’s Star Fading While Brazil’s Importance Grows

As the world moves away from the “traditional governance mechanisms” Brazil has the necessary ...

In Europe, Brazil President Says World Needs to Shop More to Get Out of Crisis

The president of Brazil, Dilma Rousseff told reporters she did not recommend adopting harsh ...

Brazilian crowd in Salvador, Bahia

Brazil’s False Image of Racial Harmony Has Accomplice: the Black Population

In retrospect, I often ponder the following questions: Do people really not see the ...

Bush Visit to Brazil Gets Official Welcome and Jeers on the Streets

The Brazilian government is preparing for the upcoming visit to Brazil by the President ...

The U.S. Amasses Its Troops and Mercenaries at Brazil’s Doors

It would be easy to make fun of President Bush’s recent fiasco at the ...

Brazilian Congress Might Consider Lula’s Impeachment

Brazil’s ruling party, the PT (Workers’ Party) was shaken by accusations that it bribed ...

Best-seller Books, Plays and Movies

By Brazzil Magazine Doido Varrido (Stark Crazy)—A stressed actor takes refuge in a resting ...

There Won’t Be Hunger in Brazil in One Year, Says Lula’s Aide

By the end of Brazilian President Luiz Inácio Lula da Silva’s mandate, no family ...