Brazil’s Corruption Probe Scares Investors

Latin American markets were once again mixed, only this time the tables were turned and Brazil posted declines, while Mexico advanced. Meanwhile, Argentina’s market was closed to mark a national holiday.

Brazil followed U.S. markets lower, and was pressured by domestic political concerns. Also, a rebound in oil prices, which once again neared US$ 51 a barrel, is not a plus for the net crude importer. Mexican stocks rose on a light news day.


Brazil’s benchmark Bovespa Index receded 66.82 points, or 0.27%, while Mexico’s benchmark Bolsa Index advanced 37.12 points, or 0.29%.


Brazilian issues returned some of the gains earned in yesterday’s session, amid some mixed economic reports. Political tensions also added to local market volatility.


Congress opened an inquiry today investigating allegations of corruption at state-run firms by government allies. The government has until midnight tonight to stop the investigation by convincing lawmakers to remove their signatures from a petition necessary for the probe to continue.


On the economic front, the Brazilian Census Bureau, or IBGE, said that inflation advanced 0.83% in the April 14 to May 13 period, above the 0.74% rise logged in the March 15 to April 13 period.


The IBGE said the increase was caused by higher prices of government-controlled medical drugs and an increase in electric energy rates. For the year ended May 13, the rate totaled 8.19%.


Separately, São Paulo’s Fipe research institute reported that the consumer price index in Brazil’s largest city advanced 0.50% in the four weeks ended May 23, easing from the 0.58% rise tallied for the four weeks ended May 15.


Also, the IBGE reported that the official jobless rate remained flat at 10.8% in April, ending three consecutive months of advances. The figure arrived at the lower end of analyst estimates and is well below the 13.1% rate logged in April 2004.


Turning to corporate news, Brazil’s Mines and Energy Minister Dilma Rousseff announced that the government may lose state-run oil firm Petrobras SA’s assets in Bolivia due to the heightening crisis in that country. 


Last week, Bolivia signed a new law that raised the combined royalty and tax rate on oil and gas production to 50% from approximately 38%.


Mexican stocks once again headed into the black, following a slight decline yesterday. Trading may be tentative ahead of this Friday’s Bank of Mexico meeting in which it will decide on domestic interest rate levels.


Economists anticipate the central bank will keep rates steady for the second-straight month. In corporate action, Telmex L shares moved higher, as investors continue to cheer the firm’s announcement on Monday that it would split its shares.


Elsewhere, Venezuela’s finance minister announced last night that Venezuela intends to buy an additional US$400 million in Argentine bonds before the end of the year.


Thomson Financial Corporate Group – www.thomsonfinancial.com


PRNewswire

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

Hostages Taken by Brazilian Indians Are Freed

Members of four Brazilian Indian groups, the Krikati, Gavião, Awa-guajá and Guajajara, have now ...

Car Sales Grow 60% in Brazil to Reach Record 353.700 Units

Car output in Brazil soared in March as manufacturers ramped up production to keep ...

A Brazilian

Want to Be a Prostitute? The Brazilian Government Can Teach You How

The Brazilian government maintains in the site of the Labor and Employment Ministry a ...

Arabs Show Interest in Leaning Brazil’s Airplane-Making Know-How

After a visit to Brazilian aircraft maker Embraer, the Arab ambassadors to Brazil seemed ...

Brazil Sees Serious Hurdles to Economically Integrate Latin America

According to the Brazilian president Luiz Inácio Lula da Silva's foreign policy advisor Marco ...

Scientists Warn Brazil Is Not Ready for a Dengue Epidemics

Scientists say that until a vaccine against dengue fever is available, controlling the disease ...

On Advice of Counsel

1. President Lula should legalize all immigrants living in Brazil. 2. Should assist Brazilians ...

Brazilian Sugar Company Builds Refinery in Syria

The construction of the sugar refinery of Syrian and Brazilian capital is going at ...

The PMDB Is Already Campaigning for National Elections in Brazil Despite the Law

The Party of the Brazilian Democratic Movement (PMDB), Brazil’s biggest political party, and part ...

Financial Market Forecasts 4.5% Inflation for Brazil in 2006

Brazil’s financial market gives every indication that the Brazilian Broad Consumer Price Index (IPCA) ...