Latin American shares were mixed to lower this Friday, pressured by a fall in Brazilian issues. Trading followed a similar pattern to the previous day, with Brazil and Argentina showing weakness, while Mexico advanced.
News was relatively light; although, Argentina’s government reported a weaker-than-expected unemployment rate for the first quarter.
Brazil’s benchmark Bovespa Index slumped 306.60 points, or 1.23%, while Mexico’s benchmark Bolsa Index leapt 88.13 points, or 0.69%. Argentina’s Merval Index receded 22.16 points, or 1.52%.
Brazilian stocks witnessed another lackluster session, as there were few news reports to dictate direction. Brazil posted solid gains earlier in the week, tracking a U.S. advance, but interest in the domestic market petered out after the central bank raised the base Selic rate for the ninth-straight time midweek.
Aircraft manufacturer Embraer said that it is not using military contracts to obtain government subsidies, contrary to some media reports. News reports have recently quoted rival Bombardier officials as making the allegations.
Elsewhere, air carrier Tam SA said that it will offer a total of 30.190 million shares, with 21.133 million through an initial public offering and 9.057 million through a secondary offering. The firm expects a price within a range of 18 and 23 reais.
Mexico continued to buck the broader Latin American market trend by posting gains, while news was light on the session. Mexico continues to reap the benefits of Alfa’s sale of its stake in Hylsamex, which has kept Alfa’s stock in the black.
Mining firm Grupo Mexico said that minority shareholders, Cerro Trading and Phelps Dodge, in its Southern Peru Copper unit intend to sell their stakes in the firm. Southern Peru filed with the U.S. Securities and Exchange Commission for a secondary offering of up to 22.6 million common shares.
Argentine shares receded amid low volume, as traders wait for the government to conclude its US$103 billion debt swap. The settlement is expected to occur sometime next week.
In economic reports, Indec, the national statistics agency, said that the unemployment rate in the first quarter leapt nearly one percentage point to 13.0% from 12.1% in the fourth quarter of 2004. The most recent reading was also well below economist expectations.
Elsewhere in Latin America, Chile’s bank regulator SBIF said that local banks and financial institutions earned net 262.57 billion pesos during the first four months of 2005. The result is 3.6% higher on an inflation-adjusted basis from the corresponding period a year ago.
Thomson Financial Corporate Group