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

FTAA: Brazil’s Poison Pill – Final Part

The successful policy against AIDS implemented in Brazil will be put in jeopardy if ...

While Waiting for Interest Cuts Bulls Have Party in Brazil

Latin American markets turned notably higher, following two consecutive down days in Brazil and ...

The Art of Deception

Americans and the rest of the world are watching different wars on TV: the ...

Brazil Promotes Breast-Feeding Up to the Age of Two

The importance of breast feeding until the age of two and the supplementation of ...

Brazil Keeps Saying No to Honduras, But Winner Vows to Ask for Lula’s Blessing

The support from Brazilian president Luiz Inácio Lula da Silva is being sought by ...

Full Plate of Trade Fairs for Brazil in Arab World

The Arab Brazilian Chamber of Commerce (CCAB) is going to promote Brazilian company participation ...

Brazil Gets Better Grade in Fighting Corruption But Still Fails

The latest report card for global corruption given annually by the London-based Transparency International ...

Brazil's National Anthem

In Defense of Brazil’s Beautiful and Moving National Anthem

When I told my Brazilian wife about an article I read recently bashing her ...

Santa Catarina, Brazil, Boosts by 28% Exports to Mercosur

Santa Catarina, a state in the South of Brazil, has increased its exports to ...

Brazil Salaries Have Lost 1/3 of Purchasing Power

Brazil’s Inter-Union Department of Statistics and Socio-Economic Studies (Dieese) dismisses the possibility that last ...