Lula’s Speech Pleases Moneymen and Brazil’s Market Soars

Latin American markets endured a mixed session, but Brazil helped brighten the region with an impressive rebound late in the day. Brazil initially came under considerable pressure, as the ongoing political scandal threatened to ensnare the country’s President.

Mexican issues endured a bout of profit-taking and felt the pressure of U.S. market weakness. U.S. stocks tumbled on surging oil prices, disappointing economic reports and a lackluster financial release from technology titan Dell. Argentina also declined on the day.


Brazil’s benchmark Bovespa Index rebounded 317.62 points, or 1.19%, while Mexico’s benchmark Bolsa Index negated 95.73 points, or 0.65%. Argentina’s Merval Index slumped 17.26 points, or 1.15%.


U.S. economic news disappointed. The trade deficit widened US$ 58.82 billion in June from US$ 55.4 billion in May. In addition, the University of Michigan consumer sentiment index declined to 92.7 in August from 96.5 in July.


Brazilian shares posted an impressive turnaround, following steep declines earlier in the session that stemmed from investor concerns surrounding the ongoing campaign finance and cash-for-votes scandals.


Former congressman Waldemar da Costa Neto said in an interview with news magazine í‰poca that President Luiz Inácio Lula da Silva was aware of illegal donations made by the Workers Party during his 2002 presidential campaign.


Meanwhile, in an address to the nation today, President Lula denied knowledge of the illegal campaign funding and urged his cabinet to ensure that the investigation doesn’t hinder economic growth.


Also, PT President Tarso Genro admitted that the Workers Party participated in undeclared funding activities, but pledged to rebuild the party. Genro also said that President Lula should not be impeached.


Folha de S. Paulo’s polling institute, DataFolha, said that a public opinion poll showed that President Lula would lose the presidential election, if held now, to his main opponent in 2002, São Paulo Mayor José Serra, by a margin of 48% to 39%. Still, only 29% of those polled supported the impeachment of Lula, while 63% support the continuation of his administration.


On the corporate front, a major investment house upgraded Banco Bradesco to “buy” from “neutral,” as the broker sees the bank improving further due to its recent upbeat earnings outlook.


Separately, another investment bank lowered its price targets for wireless firms Telemig Celular to US$ 45 from US$ 48 and Tele Norte Celular to US$ 10 from US$ 12.


Mexican shares followed the U.S. markets lower, after the IPC index reached another record high yesterday. As expected, the Bank of Mexico kept the daily money market liquidity restriction, or corto, unchanged at 79 million pesos. The move follows recent economic data that showed a rebound in the consumer price index.


Argentina fell on the day, as investors are somewhat disappointed that second-quarter earnings did not yield stronger-than-expected results. Markets will be closed on Monday for a national holiday.


On the deal front, Grupo Clarin SA acquired 25% of Cablevision SA for an undisclosed amount.


In earnings news, last night, Banco Frances said that it swung to a second-quarter net profit of 30.28 million pesos from a loss of 44.62 million pesos a year ago. Still, the firm’s operating profit slipped to 87.9 million pesos from 106.2 million pesos a year ago.


Thomson Financial Corporate Group – http://www.thomsonfinancial.com

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

UN Calls for an End to Slavery in Brazil

An United Nations independent human rights expert has called Brazil to strengthen efforts to ...

Number of Cosmetics Factories Grow 8.7% in Brazil

A study by the Brazilian Association of Toiletries, Perfumes & Cosmetics Industries (Abihpec) indicates ...

Soccer: Brazil to Host 2014 World Cup

The president of the Chilean Football Association Reinaldo Sánchez almost but confirmed Brazil as ...

A Plan to Alleviate Brazil’s Favela Plight

In the second half of this year, Brazil’s Ministry of Cities will begin to ...

Brazil’s Lula Is Against Reelection, But He’ll Run Again Anyway

In an interview with radio stations on Wednesday, December 8, Brazilian President Luiz Inácio ...

Mercosur Summit Without Chavez Is All Talk and no Teeth

Mercosur presidential summit in Paraguay approved Friday, June 29, steps to speed cross-border shipments ...

Argentina Is No Brazil Yes Man, Says Minister Sigal

Argentina “needs” Brazil as a good trading partner on equal footing but not at ...

Brazilian Conservationist Kills Self to Protest Alcohol Plants

Francisco Anselmo de Barros, 65, wrapped himself in an alcohol-soaked blanket and set it ...

Brazil Exports in 2008 Reach US$ 126 Billion and Imports, US$ 110 Billion

So far this month, Brazilian exports reached US$ 14.924 billion, with a daily average ...

Brazil Will Back Hamas As Long As It Recognizes Israel

The Brazilian government says it will collaborate with any Palestinian government that wants peace ...