Brazil’s Opposition Picks Sí£o Paulo Governor for President and Market Cheers

Latin American stocks posted solid gains, with Brazilian shares getting a boost from reports that Brazil’s main opposition party has likely picked a market-friendly candidate to run in October’s presidential race. Meanwhile, Mexico’s bolsa followed the U.S. market higher.

Brazil’s Bovespa Index leapt 748.51 points, or 2.03%. Mexico’s benchmark Bolsa Index climbed 234.85 points, or 1.26%, while Argentina’s Merval Index added 7.27 points, or 0.41%.

Brazilian stocks surged amid indications that the main opposition party has chosen a market-friendly candidate to run in the 2006 presidential election. The Social Democratic Party (PSDB) has chosen Sao Paulo Governor Geraldo Alckmin as its 2006 presidential candidate, news services reported, citing a top party official.

A formal announcement by the party committee is expected later today. Alckmin, which is currently governor of Sao Paulo, reportedly beat out José Serra, mayor of São Paulo, for the party nomination.

As such, Alckmin is expected to go up against President Luiz Inácio Lula da Silva in the October elections. Alckmin has said he endorses the austere fiscal and monetary policies pursued by former President Cardoso and continued by Lula.

Lending additional support to Brazilian shares, data released this Tuesday, March 14, showed that U.S. retail sales fell more than expected in February, helping to ease worries that the U.S. Federal Reserve will be forced to speed up its pace of raising interest rates to cool down the economy and contain inflation.

In local economic news, the São Paulo Federation of Industries reported that industrial employment in São Paulo state rose 0.12% in February from January.

On the corporate front, Petrobras said yesterday that it will propose to shareholders a US$ 7.035 billion capital increase at a meeting April 3. The increase will be obtained from an incorporation of a part of the company’s retained profits rather than from the issuance of new shares.

Mexican shares rallied on the day, alongside strong U.S. market trading. U.S. shares rallied on very strong corporate results from Goldman Sachs, while economic reports were more downbeat, tempering interest-rate hike concerns.

Within the telecom group, the Federal Telecommunications Commission, or Cofetel, said that activity within its telecommunications production index expanded 18.5% in the fourth quarter of 2005, compared to the corresponding period a year ago. Meanwhile, the rate slowed from the third quarter’s 26.5% year-over-year growth rate.

Argentina’s shares followed the broader regional market higher. The central bank announced last night an increase in the bank’s minimum reserve requirements for savings and checking deposits and ended the practice of paying interest on those funds. As a result, liquidity conditions will be tightened, which may encourage longer-term saving and lending.

On the corporate front, oil firm Petrobras Energia said that two of the National Securities Commission’s accounting law changes will lead to a reduction in the firm’s net assets of about 800 million pesos. That firm’s stock tumbled on the day.

Spanish-Argentine firm Repsol YPF announced that it may acquire a 21% stake in a liquefied natural gas joint venture that is led by Russia’s OAO Gazprom.

Thomson Financial – www.thomsonfinancial.com

Tags:

Ads

You May Also Like

Brazilian in UN’s Three-Men Commission to Probe Israeli Excesses in Lebanon

A Brazilian ambassador is one of the three members of a commission appointed by ...

Honda Introduces This Year in Brazil New Flexible Fuel Vehicle

Honda announced today that it has developed a new flexible fuel vehicle (FFV) system ...

What the World Needs Is a Tsunami of Conscience

I arrived at the Colombo airport at two in the morning on Sri Lankan ...

All Over Brazil Students March for University Reform

Brazil’s National Students’ Union (UNE) promoted demonstrations throughout the country today, the National Day ...

Brazil Gets Record Exports and Imports. But Trade Surplus Is Down

Brazil's balance of trade surplus (exports minus imports) stood at US$ 944 million on ...

Brazil Raises Women Trafficking Theme at World Social Forum

The head of the Brazilian Special Secretariat of Women’s Policies (SPM), Minister Nilcéa Freire, ...

Brazil to Harvest 450 Million Tons of Sugar Cane for Fuel, Sugar and Cachaça

Brazil’s sugar cane crop in the 2005/2006 growing year should reach 450.2 million tons, ...

Brazil’s Asymmetrical Challenges & the World’s Covetous Eyes on the Amazon

There are three types of people, a saying goes: those who make things happen, ...

The Birth and Passion of Brazil’s Press

Given the current precarious, uneasy, hybrid and indebted state of Brazilian journalism, in which ...