Bolivia’s Oil Nationalization Can’t Stop Brazil from Reaching Record High

Latin American stocks bounced higher, after a long holiday weekend. Monday, May 1st, Brazilian, Mexican and Argentinean markets were closed for the May Day holiday. Brazilian investors chose to ignore Bolivia’s surprise decision to nationalize its oil and gas industry, which could impact select firms with interests in the country, as well as markets that import oil and gas from Bolivia.

Brazil’s Bovespa Index surged 653.16 points, or 1.62%. Mexico’s benchmark Bolsa Index advanced 433.68 points, or 2.10%, while Argentina’s Merval Index edged up 1.19 points, or 0.06%.

Brazilian shares leapt past the 41,000 mark and reached a record high, thanks to foreign investor inflows. Investors shrugged off concerns regarding Bolivia’s move to nationalize its oil and gas industries, which will entail foreign firms signing new contracts.

Brazil receives 50% of its natural gas from Bolivia, and Petrobras, Brazil’s state-run energy firm, is a major investor in Bolivia where it operates two refineries.

In upbeat economic reports, the Ministry of Development, Industry and Foreign Trade said that the country posted a foreign trade surplus of US$ 3.1 billion in April, boosting the surplus so far this year to US$ 12.44 billion.

Turning to the financial sector, Banco Itaú rallied, after the company confirmed that it will buy the Brazilian assets of BankBoston. Banco Itaú also has the exclusive rights to buy the firm’s operations in Chile and Uruguay.

Separately, a major investment firm downgraded Banco Do Brasil to "peer perform" from "outperform" due to the stock price’s recent appreciation.

Mexican shares traded similarly to Brazil, reaching record highs on the day. Investors are anticipating strong quarterly earnings from America Movil, which is due out this evening.

Copper mining firm Grupo Mexico edged higher. This past weekend, workers at the firm’s lead and zinc mine in Taxco ended a week-old strike; although, strikes at its copper mine La Caridad and zinc mine in Zacatecas state continued.

Elsewhere in the sector, Industrias Penoles said that stronger metals production and higher prices helped the firm to double its first-quarter net profit to 1.14 billion pesos from 567.9 million pesos a year ago. Sales surged to 6.92 billion pesos from 5.09 billion pesos.

ICA said that its first-quarter net profit surged, partly due to its increased stake in GACN. The engineering and construction firm’s profit rose to 130.9 million pesos from 70 million pesos in the year-earlier period. Sales advanced 11% to 4.62 billion pesos, and operating profit leapt 72% to 354.4 million pesos.

Argentine issues did not partake in the broader regional rally, but instead settled for a slight uptick. Investors are awaiting the kick-off to the country’s own earnings season, which is not set to begin until next week.

Thomson Financial – 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 Cuts Investments in Bolivia Due to New Oil Law

Brazilian government Oil Company Petrobras which operates in Bolivia and is responsible for 20% ...

Mãe de santo Olba de Alaketu

Brazil’s Candomblí© High Priestess Dies in Bahia, at Age 80

Respected and renowned Afro-Brazilian high  priestess (mãe de santo)  Olga de Alaketu, who royal ...

WWF's headquarters in Corumbá, Brazil

US College Students Get Chance to Meet Brazilian Amazon Up Close

American students from several US states have been selected to study conservation in the ...

Brian Smith, president of Coca-Cola of Brazil with the Brazilian line of products

Coca-Cola Is Betting on Brazil’s Thirst

When the political crisis in Brazil first gave signs that it would be around ...

Brazil and the New Economic Miracle. The US Has a Lot to Learn!

When the sovereignty wealth funds of the world (including countries such as China, Saudi ...

Agribusiness, the Main Drive Behind Brazil’s Surplus

Once more Brazil’s agribusiness trade balance surplus is going to sustain the country total ...

Despite Crisis Brazil’s Retail Grew Almost 6% Last Year

In 2009 the turnover of Brazilian retail trade grew 5.8%. It was the lowest ...

Consumers Blast U.S. for Taxing Brazil Steel

U.S. steel-consuming industries will continue to struggle to be competitive in the wake of ...

Brazil: Making a Difference amid Abject Poverty

The Pastoral da Criança (the Children’s Ministry) is a social program of the Catholic ...

Brazilian Foreign Investments Zoom to US$ 23 Billion in 2006

Brazilian foreign investments amounted to US$ 15.022 billion in October, compared with only US$ ...