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

Minimum Mandatory Schooling in Brazil Rises to 9 Years

Brazilian President Luiz Inácio Lula da Silva will sign into law a bill raising ...

Brazil’s Ricupero Retires from Unctad

The secretary general at the United Nations Conference on Trade and Development (Unctad), the ...

Brazil’s Lula in Ecuador Pleading for Unity

Brazil President Luiz Inácio Lula da Silva was awarded the Cordon of the Ecuadorean National ...

Brazilian Congressmen Want End to Nepotism

Brazil’s Chamber of Deputies’ Constitution and Justice Commission (CCJ) approved yesterday, unanimously, the Constitutional ...

Brazil’s Petrobras Has Record US$ 9.7 Billion Net Profit in First Half

Brazil state-controlled oil and gas multinational Petrobras had record profit in the second quarter ...

Brazil Shares With World Experiences on Dealing with Racism

For the Minister of the Special Secretariat of Policies to Promote Racial Equality (Seppir), ...

Dear Saudis, Play Safe, Bring Your Money to Brazil

If I were the Finance Minister of Saudi Arabia, I would be cashing in, ...

Wind Energy Gets Big Boost in Brazil

By December, 2006, Rio Grande do Sul, in the Brazilian South, will possess the ...

Brazil’s National Referendum Challenges Privatization of Mining Giant CVRD

From September 1st to 9, social movements from all over Brazil held a popular ...

Lula’s Favorite Gets Face Lift Before Running for Brazil’s Presidency

Brazilian president Luiz Inácio Lula da Silva had already shown its preference. Now the ...