Brewing Scandal with Finance Minister Makes Brazil See Red

Latin American stocks slumped, with Brazilian shares declining amid heightened concerns over an ongoing campaign-finance scandal. Meanwhile, a bout of profit taking dragged Mexican shares lower.

Brazil’s Bovespa Index fell 213.71 points, or 0.70%. Mexico’s benchmark Bolsa Index dropped 16.01 points, or 0.10%, while Argentina’s Merval Index added 11.23 points, or 0.71%.

Brazilian stocks fell amid growing concerns about a brewing political scandal allegedly involving Finance Minister Antonio Palocci.

Thursday, November 10, the market cheered a statement from Vladimir Poleto, a former aide to Palocci, denying the Workers’ Party (PT) accepted money from Cuba’s government to finance its election campaigns.

However, an investigative committee later that day played an audio tape on which Poleto confirmed that the party had received at least US$ 1.4 million from Cuba.

In earnings news, electric power holding company Eletrobrás reported a net loss of 320 million reais, much narrower than its year-ago net loss of 688 million reais. Results were helped by lower operating costs.

Petrobras posted a lower-than-expected net profit. Brazil’s state-run oil firm posted a net profit of 5.63 billion reais, compared to 5.56 billion reais a year ago. Net operating revenues were 35.71 billion reais from 30.17 billion reais last year, while EBITDA jumped to 12.49 billion reais from 9.55 billion reais.

Also, electric power utility Copel said its third-quarter net profit declined to 112.4 million reais from 125 million reais, partly due to higher financial costs. However, net revenues climbed from a year earlier.

In deal news, mining giant CVRD raised its offer for Canada’s Canico Resource to C$ 20.80 per share from C$ 17.50 per share. CVRD said that Canico’s board will recommend the new offer to shareholders.

Meanwhile, Mexican shares slipped, undermined by weakness in select blue chips following strong gains earlier this week. Retailer giant Walmex dropped as investors took some profits following gains earlier this week on robust same-store sales results for October.

Waste management firm Promotora Ambiental SA had a lackluster debut in its first day of trading on the Mexican Stock Exchange today. The company sold 58.2 million shares today to raise 1.22 billion pesos.

On the upside, America Movil climbed after an influential investment bank raised its price target for the company’s American Depositary Receipts to US$ 34 from US$ 28, citing continued market share gains in Latin America versus Spain’s Telefonica Moviles.

Elsewhere, Argentine issues edged up amid mild bargain hunting following five straight days of losses for the market. In corporate news, the Argentine government gave conditional approval to Acindar’s US$ 83.2 million sale of its tube assets to Siderar and another company. The stock rose.

Meanwhile, Sociedad Comercial del Plata posted a net profit of 159.35 million pesos for the nine-month period ended September 30, reversing a year-ago net loss of 10.83 million pesos.

Thomson Financial – www.thomsonfinancial.com

Tags:

Ads

You May Also Like

Brazil GDP Expected to Grow 4.71% This Year and 4.33% the Next

Brazilian market analysts slightly increased the projection for Brazil's economy growth this year while ...

Brazil Creates New Corn for Northeast’s Semi-Arid Region

Last Friday, May 27, in the state of Sergipe, the Brazilian Agricultural Research Enterprise ...

The Case of Brazil’s Supreme Against PT Leaders Behind Mensalão to Start October 1st

On Wednesday, September 12,, the justice-rapporteur in Penal Case 470, known as the mensalão, ...

Brazil’s Lower Interest Rates Bring 7.1% Growth in Construction

The civil construction industry in Brazil grew 7.1% in 2006, after recording a reduction ...

Lebanon President to Visit Brazil, the Country with Most Lebanese Immigrants

Lebanese president, Michel Suleiman, should visit Brazil this year. According to the consul general ...

Rad Carpet

Santana de Parnaíba, in the state of São Paulo, famous for its connection to ...

With Such Creepy Lullabies It’s a Miracle Any Brazilian Kid Can Go to Sleep

Most Brazilian lullabies and children songs are scary like hell. Some of them are ...

Brazil’s Offer to Mediate in Venezuela-Colombia Conflict Vetoed by Chavez

Venezuelan President Hugo Chavez rejected on Friday a Brazilian proposal for a joint border ...

They Started in 1958 with Hay Mattresses. Today They Sell Upholstery in the US and Europe.

The Arab countries were responsible for 40% of external sales of upholsteries from Americanflex, ...

Brazil Theater’s Grande Dame Makes Her Debut in New York, at Age 90

When someone speaks about theater in Brazil, it is inevitable to mention the name ...