Brazilian equities climbed, as the relatively speedy resolution of the U.S. presidential election removed investor concern over possible delays.
Incumbent President George W. Bush scored a clear victory, with Democratic candidate Senator John Kerry conceding the election this afternoon.
Brazil’s benchmark Bovespa Index leapt 387.13 points, or 1.66%. Brazilian issues mirrored gains in foreign equities, following a market closure in Brazil yesterday for All Souls Day, as the U.S. election reached a speedy resolution.
On the earnings front, Gerdau continued a trend of positive releases out of the steel sector. The company said its third-quarter net profit surged to 1.19 billion reais, more than four times the 245 million reais earned a year ago and up 36% sequentially.
Brazil’s leading supplier of steel products attributed the result to improving results in its North American units and higher prices for its steel products.
Gerdau said EBITDA rose to 1.7 billion reais in the quarter from 671 million reais last year, as net revenue leapt 50% to 5.23 billion reais.
Still, AmBev stated that its net income fell 61% to 131.7 million reais in the third quarter from the year-earlier period, due to expenses related to foreign divisions such as Argentina’s Quinsa and Canada’s Labatt as well as losses from the exchange rate effect on its foreign investments.
However, net revenue climbed 46% to 2.95 billion reais, as Brazilian beer volume sales rose 17.1% from the corresponding period one year prior. That issue strengthened in response.
Amid research notes, an influential brokerage upgraded Sabesp to “outperform” from “peer perform.” The analyst indicated that shares of Latin America’s largest water and sewage utility are likely to outperform industry peers he covers, following “significant underperformance amidst a strongly improving macroeconomic environment.”
On the economic front, the government reported that Brazil’s trade surplus narrowed to US$ 3.01 billion in October, for a six month low, from US$3.17 billion in September.
The decline in October represented the fourth month of contraction, as a growing economy boosted imports of machinery and raw materials to a record high level and falling prices of commodities such as soybeans trimmed exports.
Still, the country’s trade surplus rose from the US$ 2.54 billion posted in the same month last year.
Thomson Financial Corporate Group
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