New Cabinet Chief Does Not Boost Brazilian Market

Latin American shares were mostly lower, with Brazil and Mexico sharing the blame for the downbeat session. Meanwhile, Argentine shares bounced higher, as investors returned to the market following its closure yesterday for Flag Day.

Brazilian investors digested a new appointment to the position of chief of staff. Mexico’s demise can mostly be pinned on profit taking, after a string of positive sessions.


Brazil’s benchmark Bovespa Index tumbled 323.82 points, or 1.24%, while Mexico’s benchmark Bolsa Index negated 161.37 points, or 1.18%. Argentina’s Merval Index jumped 18.10 points, or 1.25%.


Brazilian shares declined for a second day, amid a variety of political, economic and corporate news items.


President Luiz Inácio Lula da Silva last night appointed Energy Minister Dilma Rousseff as chief of staff, replacing José Dirceu.


Dirceu resigned from the post last week after being accused by Congressman Roberto Jefferson of being involved in a bribery scheme that supported the ruling Workers Party.


Turning to major brokerage reports, a large investment bank upgraded Brazil’s banking sector to “market weight” from “market underweight” and started Banco do Brasil at “outperform.”


The brokerage said that with the inclusion of Banco do Brasil, which it expects will see a lift in its stock price by the end of 2005, its outlook for the banks that it covers is brighter.


Meanwhile, another investment house resumed coverage on Latin America’s basic materials sector. The firm was positive on metals and mining firms, cautious on steel issues and had an in-line view on the pulp and paper industry.


Turning to economic reports, the central bank said that the domestic current account surplus arrived at US$ 13.38 billion, or 2.06% of GDP, for the 12 months through May.


That result was smaller than the prior reading of more than US$ 14 billion in April. For the month of May, Brazil’s surplus totaled US$ 615 million.


Mexican issues broke their winning streak, falling after six consecutive positive sessions. The domestic market gave up gains despite a robust retail sales report in April.


The National Statistics Institute, or Inegi, said that retail sales surged 8.9% in April from the year-earlier period. The reading easily surpassed economist expectations. On a seasonally-adjusted basis, April sales declined 0.5% from March.


Cemex was again in focus today, after the cement titan provided upbeat second-quarter earnings guidance yesterday. The firm today said it expects synergy savings of US$ 360 million by 2007 amid its assimilation with RMC Group, which it recently bought.


Meanwhile, Argentina’s market opened to a positive start, following its closure yesterday due to the Flag Day holiday.


In corporate reports, France’s Suez said yesterday that it has entered into exclusive negotiations with Argentina’s Fides Group and Grupo Energia BV to divest its interest in Aguas Provinciales de Santa Fe, an Argentine water company.


Thomson Financial Corporate Group – www.thomsonfinancial.com

Tags:

Ads

You May Also Like

China Impressed with Brazilian Beef, Says Vice President

China has approved Brazilian sanitary conditions for meat production, as well as soy planting ...

Priest, Superstar

Padre Marcelo is as far as you can be from a clergy generation that ...

Assuncií³n Accuses Brazil of Triple Taxing Paraguayan Goods

Mercosur Foreign Affairs and Finance ministers met Thursday, June 28, in Paraguay, ahead of ...

Brazil’s Deadbeats Grow 13%

In comparison with June, consumer delinquency in Brazil was down 3.7% in July, maintaining ...

Brazil Hosts 1,000 LatAm Youth for UN Millennium Goals

Young people from Latin America and the Caribbean gather tomorrow in southeast Brazil for ...

Brazilian Beef Gets Quality Seal

Like French champagne, camembert cheese and other famous products, farmers from the southwestern region ...

Ready for War: Brazil Buys 250 German Tanks, French Fighters Coming Soon

Brazil has just purchased 250 German Leopard 1 A5 tanks, which will be used ...

Brazil Ready to Adopt European Light Rail Trains

Brazil may soon produce part of the system known as Light Rail Vehicle (VLT, ...

Brazil Expects Rich Nations Will Keep Their Promises to Haiti

Brazilian Minister of Foreign Relations, Celso Amorim, affirmed that “the problems faced by Haiti” ...

ACM and Bahia's Governor Paulo Souto

Brazil: The Day I Played Hardball With Bahia’s Governor

My apartment overlooks an intersection in the center of Santo Antônio de Jesus, a ...