Lower Oil Prices Stir Brazil Market Up

Brazilian and Latin American shares continued to post gains, as traders are bullish on domestic corporate finances. Mixed U.S. economic reports failed to negatively impact Latin America.

On that front, U.S. consumer confidence declined by a greater-than- expected amount in April, while new home sales unexpectedly rose in March.


Mexican stocks posted the most significant gains, followed by Brazil. Argentina took a negative stance ahead of the latest development in the country’s debt restructuring.


Brazil’s benchmark Bovespa Index advanced 73.25 points, or 0.29%, while Mexico’s benchmark Bolsa Index surged 200.62 points, or 1.62%. Argentina’s Merval Index tumbled 16.14 points, or 1.18%.


Brazilian stocks continued to move higher, as domestic funds bought into the market. Lower oil prices may have aided positive momentum, as Brazil is a net importer of crude.


Traders are anxious to view minutes from the central bank’s most recent interest rate meeting, which will be released on Thursday. An indication of further rate hikes could weigh on market sentiment.


In corporate reports, AmBev announced that its first-quarter domestic beer sales volume advanced 12.9% to 14.9 million hectoliters from the prior quarter.


Latin American beer sales, excluding Brazil, jumped 9% to 5.4 million hectoliters. AmBev’s domestic soft-drink sales grew 2.6% in the first quarter to 4.75 million hectoliters from the fourth quarter, while sales surged 15.8% in Latin America, excluding Brazil.


Meanwhile, the Federation of Petroleum Workers, a union that represents 38,000 Petrobras workers, said that it will schedule a five day warning strike if the firm does not construct a more lucrative profit-sharing plan by Friday.


Separately, Petrobras signed a US$1.2 billion deal with the Chinese Export- Import Bank to finance the building of a gas pipeline that would link the region’s Southeast to its Northeast.


Mexican shares added to yesterday’s impressive rally, in which stocks posted their biggest single-session gains since November 2002. Upbeat first-quarter results are feeding investors’ appetite.


On the economic front, the National Statistics Institute said that its economic activity indicator, or IGAE, advanced 3.4% in February from the year-ago period. The figure edged up 0.14% from January.


In corporate reports, America Movil SA boosted its 2005 capital expenditure plan to US$ 2.4 billion from US$ 2.1 billion, based on better-than- expected first-quarter subscriber growth.


The wireless phone company added 5.2 million wireless subscribers in the first quarter, boosting its total to 66.3 million subscribers.


For the first quarter, the firm posted a 33.2% jump in sales to 38.8 billion pesos, compared to the same period a year ago. EBITDA jumped 23.1% to 12.6 billion pesos, while net profit rose to 4.5 billion pesos from 4.4 billion pesos last year. America Movil L shares surged on the session.


Elsewhere, cement giant Cemex SA divested its 11.9% stake in Chile’s Cementos Bio Bio SA for 38.05 billion pesos. Part of the proceeds from the sale will be used to reduce debt.


Argentine shares ebbed on the session, ahead of tomorrow’s U.S. Court of Appeals hearing regarding frozen defaulted bonds, which have postponed Argentina’s US$ 103 billion debt swap settlement. A final ruling may not be handed down for weeks.


Thomson Financial Corporate Group
www.thomsonfinancial.com


PRNewswire

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