Brazilian and Latin American markets rose, building on a rebound that started on Wednesday. The advance came despite global crude oil prices that again surpassed US$ 55 a barrel after a major brokerage forecast a “super spike” in crude, mounting political tensions in Mexico and a delay in the settlement of Argentina’s debt exchange.
Brazil’s benchmark Bovespa Index rose 140.87 points, or 0.53%, while Mexico’s benchmark Bolsa Index added 23.48 points, or 0.19%. Argentina’s Merval Index dipped 0.70 points, or 0.05%.
Brazilian equities extended a rally from the prior session, despite a spike in crude oil prices and a fall in the U.S. market. Shares of state-run oil firm Petrobras climbed, even though its workers were on a 24-hour strike to demand a larger share of the company’s profits.
Petrobras said the strike is not impacting production and added that on Wednesday it hit a record for daily output in Brazil. Yesterday, daily production within Brazil hit 1.65 million barrels, up 0.6% from the prior record established on March 14, 2003.
Brazilian steelmaker Gerdau said its board of directors approved a plan to capitalize cash flows and investment reserves by issuing new shares and crediting stockowners with 50 bonus shares for every 100 outstanding shares, ultimately raising the firm’s total market capitalization by 50%.
Shares of Brasil Telecom were active, on news that yet another court has rendered a competing decision in an ongoing battle for control of the fixed-line operator.
In economic news, the private Getúlio Vargas Foundation’s IPC-S index rose 0.68% in the four weeks to March 23, advancing a little faster than hoped as prices strengthened. Recent inflation is encouraging concern about whether the central bank might adjust its base interest rate yet again.
Elsewhere, Mexican issues rose, extending a rebound from the prior session, despite rising political tensions in Mexico. Traders indicated that the local market is recovering from a robust bout of profit taking in recent weeks that drove the index to 12,500 points from 13,800 points, and that it appears set for additional gains.
On Friday, congress decides on whether to impeach Mexico City Mayor Andres Manuel Lopez Obrador to face charges arising from a land dispute.
The popular mayor of the left-wing Democratic Revolution Party has denied that he disregarded a judge’s order to halt construction of an access road on a tract of expropriated land, and says the government is using the incident to prevent him from running in the 2006 presidential election.
Late yesterday, America Movil said it paid US$ 21.1 million for a 20-year license for a mobile-telephone band in Peru, a little more than the US$ 20.5 million base price.
According to an influential brokerage, the license should help the wireless services operator “develop and grow a subscriber base in a country with only two wireless players and relatively low mobile penetration.”
Additionally, America Movil set April 27 as the date for its shareholders assembly, in which it will propose a three-for-one stock split. America Movil shares eroded.
In other corporate developments, conglomerate Alfa said its Alpek unit purchased from Japan’s Teijin the 75% stake in synthetic fibers joint venture Akra Teijin that it did not already hold, and now owns 100% of the business. Teigin exited the business at a loss, but Alfa said it still perceives opportunities to create value with it. Alfa A shares firmed.
Meanwhile, Argentine shares ended basically flat on the heels of Wednesday’s steep rebound, due to investor caution amid a delay in the settlement of the country’s US$ 103 billion debt swap.
Argentina will postpone the physical exchange of the bonds, originally scheduled for April 1st, as it waits for a U.S. federal appeals court to rule on attachment orders for US$7 billion in defaulted securities, Cabinet Chief Alberto Fernandez reported to local radio. As of the close today, no hearing had been set.
Thomson Financial Corporate Group