LATIN AMERICAN MARKETS: Brazilian Benchmark In The Red; Argentina Up
December 15 2008 - 1:24PM
Dow Jones News
By Carla Mozee
Latin American equity markets were mixed Monday, with Brazilian
shares under pressure while Argentina's benchmark rose in the wake
of the government's plan to expand its infrastructure investment
program.
Brazil's Bovespa index fell 1.8% to 38,655. Energy and
consumer-durable shares were the only groups to post gains, but
they were off their highest levels of the session.
Oil giant Petrobras (PBR) shares rose 1.8%, pulling back from a
nearly 6% jump after crude-oil futures erased their advance. Crude
prices leaped more than 8% to above $50 a barrel, but worries about
weak demand began to outweigh expectations that OPEC will cut
production when the cartel meets later this week.
Shares of iron-ore producer Vale (RIO) rose 1.5%, the only
company in the steel sector to see share-price gains.
Communication stocks were off 3% in Sao Paulo, led by cell
services provider Tim Participacoes (TSU). Its shares fell 11% to
also pace overall market decliners.
Shares of competitor Vivo Participacoes (VIV) fell 0.9%.
Credit Suisse named Vivo and cable company Net Servicos de
Comunicacao (NETCD) among its 2009 top picks in the Latin American
telecom sector, and said it was overweight wireless stocks.
But the broker also lowered its 12-month target prices for the
group by an average of 21% "to incorporate less favorable macro
assumptions."
Shares of Net were off 5.6%.
Cosan Ltd. (CZZ) shares lost 4.2%. The sugar and ethanol
producer's holding company on Friday evening swung to a
second-quarter net loss of 380.7 million reals. Revenue rose to
715.1 million reals from 627.5 million reals a year ago.
Banking stocks were also in the red. Banco Itau (ITU) lost 4.4%,
Unibanco (UBB) fell 5.7% and Bradesco (BBD) gave up 3%.
Elsewhere, market professionals lifted their forecast for
economic growth in Brazil for 2008 while decreasing their outlook
for inflation.
Economists polled for the country's central bank weekly survey
released Monday now expect growth of 5.59%, above the previous
forecast for 5.24%. The consumer price index is now expected to
come in at 6.13%, down from 6.20%.
The decline in inflation throughout emerging markets "might help
the global economy pull out of the slump," said Danske Bank in a
research note Monday.
The drift downward in inflation figures "should open the door
for further monetary easing for most emerging markets in the coming
months."
Last week, central banks in Brazil and Chile held their
respective benchmark interest rates steady as policymakers said
they wanted to continue monitoring macroeconomic conditions.
The IPC was off 15 points to 21,390, paring earlier losses.
Trading in Mexico was closed Friday for a holiday.
Volume leader America Movil (AMX) fell 2.7% and Grupo Televisa
(TV) lost 1.1%.
The Mexican wireless giant and the broadcaster were also placed
on Credit Suisse's telecom/media top-picks list.
But the session was led by fixed-line operator Telefonos de
Mexico (TMX), with its shares up 4.8%.
Argentina's Merval rose 1.9% to 1,115.49 as the government said
it will expand its public-works spending program to 111 million
pesos, from 71 million pesos. The program is aimed at creating more
jobs to stimulate economic growth.
Stock in steel tube maker and market heavyweight Tenaris (TS)
rose 2.4% and shares of oil company Petrobras Energia (PZE) gained
3%.
Chile's IPSA shed 0.8% to 2,325.92.
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