Investors Take the Money and Brazilian Markets Ebb

Latin American markets were mixed to lower on the session, as Brazil pulled back, while Mexico and Argentina posted mild advances. Following a string of consecutive gains in Brazil, investors took some profits.

Also, crude oil prices surged to nearly US$ 65 a barrel, which pressured U.S. markets and possibly Brazil, as the country is a net importer of oil. Some major Brazilian financial releases were also in focus.


Brazil’s benchmark Bovespa Index receded 174.52 points, or 0.64%, while Mexico’s benchmark Bolsa Index rose 29.24 points, or 0.20%. Argentina’s Merval Index advanced 5.19 points, or 0.35%.


Brazil turned lower, following a recent string of gains, which prompted investors to book some profits. Some major financial results were in focus.


On the economic front, the Getúlio Vargas Foundation said that the General Price Index, or IGP-M, declined 0.36% in the first 10 days of August, compared to a 0.09% slide in the first 10 days of July.


Meanwhile, consumer prices dipped 0.16% in the first 10 days of this month versus a 0.02% increase in the same period during July.


On the earnings front, AmBev posted a second-quarter net profit of 305.2 million reais from 265.1 million reais a year ago, amid upbeat sales performance in its main unit in Brazil.


Revenues leapt 69.8% to 3.70 billion reais from 2.18 billion reais last year, while EBITDA surged 93% to 1.42 billion reais from 735 million reais. The beverage titan’s sales volume advanced 13.3% in Brazil in the second quarter versus last year.


Electric power utility CPFL Energia SA said that its second-quarter net profits were aided by higher consumption, more customers and increased prices.


The firm’s net profit jumped to 235 million reais from 136.8 million reais, while EBITDA was 554.2 million reais, up from 427.2 million reais. Net revenue advanced to 1.94 billion reais from 1.74 billion reais.


Within the mining group, Caemi announced a substantial jump in its second-quarter profit to 473.9 million reais from 171.6 million reais, as net revenue surged to 1.47 billion reais from 708.1 million reais.


Higher mineral ore prices bolstered the most recent results. EBITDA totaled 956.7 million reais, compared to 378 million reais, while EBITDA margin was 65% versus 53% in the corresponding period a year ago.


Steel titan CSN posted a slightly lower second-quarter profit of 419 million reais from 424 million reais a year ago, due to a fall in local steel consumption due to a drop in global steel prices. Still, EBITDA advanced to 1.21 billion reais from 1.18 billion reais. CSN’s net revenue slipped to 2.55 billion reais from 2.56 billion reais.


Mexican issues once again posted a record-high close. In M&A activity, America Movil bought Telecom Italia Mobile SpA’s Peruvian unit for 407 million euros.


In other corporate news, Grupo Mexico’s U.S. Asarco unit filed for bankruptcy protection. Asarco is in the middle of a strike by unionized workers that has reduced operating capacity down to 50%. Shares of Grupo Mexico surged in response.


Meanwhile, last night, Wal-Mart de Mexico said that its July same-store sales jumped 7.5% from a year earlier, while total sales surged 21.4% to 13.11 billion pesos. Separately, a major investment bank downgraded the retailer to “peer perform” from “outperform.”


Argentine shares also moved higher, ahead of earnings from Telecom Argentina, due out later this evening. Power generator Central Puerto swung to a second-quarter net profit of 4.8 million pesos, reversing a year-earlier loss of 47.1 million pesos, as sales jumped to 170.9 pesos from 128.7 million pesos. The firm’s operating profit totaled 6.5 million pesos, compared to a loss of 1 million pesos last year.


Thomson Financial Corporate Group – www.thomsonfinancial.com

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