• Categories
  • Archives

Finance Minister Sees Long Cycle of Growth for Brazil

Latin American ended mixed. While traders booked profits in Brazil, strength in the U.S. helped lift Mexico. Argentina ended little changed, as traders are monitoring any key development on the IMF front.

Brazil’s benchmark Bovespa Index fell 152.91 points, or 0.49%, while Mexico’s benchmark Bolsa Index climbed 116.20 points, or 0.74%. Argentina’s Merval Index added 1.35 points, or 0.08%.


Brazilian shares eased back on profit-taking, following robust gains in recent weeks. On the economic front, Finance Minister Antonio Palocci found that the economy is “sound, solid and strong… It is not a bout of growth, but the beginning of a long cycle of growth.”


Central bank Governor Henrique Meirelles added that, “we see a very clear pattern of trending down in real interest rates… we as the central bank are aiming at keeping that pattern.”


In today’s data, a weekly survey of analysts forecast gross domestic product growth of 3.28% for 2005, up from a prior forecast of 3.26%, while predictions for inflation remained unchanged, at 5.21%.


Separately, the primary budget surplus in August totaled 10.19 billion reais, up from 8.8 billion reais in July, and above expectations ranging from 7.0 billion to 9.5 billion reais.


On the corporate front, Citigroup denied that it had reached an agreement with Telecom Italia for the sale of Citigroup’s interest in Brasil Telecom, contrary to rumors last week.


Also of note, miner CVRD was active after proposing an additional dividend payment of US$ 300 million. The proposal was lower than the anticipated US$ 900 million, a disappointment apparently due to the firm’s bid for Canada’s Canico Resources.


Still in commodities news, Petrobras and Venezuela’s Petroleos de Venezuela are close to signing a deal for a heavy crude refinery in Brazil’s Northeast, reported news services.


Mexican issues, meanwhile, gained ground, in tandem with U.S. counterparts. Relief that hurricane Rita did not cause more damage, as well as strong housing data, lifted that market. U.S. existing home sales in August jumped 2.0% to 7.29 million from 7.15 million the prior month. A decline to 7.10 million had been anticipated.


Closer to home, Finance Minister Diaz predicted that the economy will likely recover in the second half of the year, while Bank of Mexico Governor Ortiz warned that inflation would not likely keep declining steadily through year’s end. Separately, July economic activity climbed 2% from a year ago, or 1.82% from June, versus the 1.34% decline from May to June.


In research, an investment bank started construction company ICA at “buy” with a price target of US$ 2.80, saying the firm’s earnings outlook for 2005 and 2006 remained attractive.


Argentine stocks advanced, amid little corporate developments, and with analysts keeping a close watch on ongoing discussions between the government and the IMF. In a statement to the IMF over the weekend, the government declared it sought a new financial program with the international body and a strategy for dealing with holdouts from its debt restructuring.


However, Argentina ignored IMF calls to lift its 2006 primary surplus target of 3% of GDP, adding that it does not plan to change its policy of buying U.S. dollars to keep the peso weaker.


Thomson Financial Corporate Group – 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

Brazil Fears High Interest Rates Only Won’t Halt Inflation

Latin American markets were mixed to higher today, as Mexico and Argentina benefited from ...

With a Woman’s Face

By Brazzil Magazine In 1987, women from Christian base communities in the Catholic parish ...

International Experts Discuss Sustainable Development in Brazil

The Brazilian Minister of Culture, Gilberto Gil, joined in today’s opening of the 1st ...

Brazil and South Korea Urge North Korea to Restart Nuclear Talks

The Presidents of Brazil, Luiz Inácio Lula da Silva, and of South Korea, Roh ...

Mexico’s Fox Vows Enduring Love and Proposes Brazil, Mercosur and the FTAA

Mexico will begin the Mercosur incorporation process during the first half of 2006 announced ...

Chavez Asks Brazilian Lula to Tell Obama to Stop US Lies and Cynicism

Hugo Chavez, the Venezuelan president, said he has authorized Brazil's leader to raise the ...

Brazil’s Foreign Debt Shrinks, But It’s Still US$ 161 Billion

Brazil’s foreign debt in May was US$ 5.956 billion less than in March, according ...

Brazil Raises Key Rate by 0.5% to 12.25% to Curb Inflation

The Brazilian Central bank raised its benchmark interest rate this week for the second ...

Best-seller Books, Plays and Movies

In a city brimming with earthly delights, one’s thoughts turn to finding a little ...