Sept. 9 (Bloomberg) -- Brazil's main stock index rose for a third week as slowing inflation spurred expectations the central bank will cut interest rates this month.
The Bovespa index of the 57 most traded stocks of the Sao Paulo stock exchange rose 479.85, or 1.7 percent, to 29,307.91, making a 3.5 percent gain this week, a third weekly gain. Gerdau SA, Latin America's largest steelmaker, led the weekly gain. Elsewhere in the region, Mexico's Bolsa rose 156.96, or 1 percent, to 15,212.88, for a 3 percent weekly gain.
Brazil's annual inflation rate dropped to a 15-month low of 6.02 percent in August, the government said on Sept. 6. The slowing inflation increased the likelihood the central bank next week will cut its benchmark interest rate for the first time since April 2004, said investors such as Pedro Thomazoni, who handles proprietary stock trading at Banco Votorantim.
``What we have now is a combination of higher-than-expected growth with a real possibility of cut in rates,'' he said in a phone interview from Sao Paulo. ``The market is pricing in a more positive economic scenario.''
Nine out of 11 economist surveyed by Bloomberg expect monetary policy makers to cut rates in their meeting next week.
On Aug. 31 the government said Brazil's economy expanded 3.9 percent in the second quarter from a year earlier, exceeding the 3.4 percent median forecast in a Bloomberg survey of 24 economists.
Bolsa Record
The Mexican Bolsa gained for a second week, rising to a record 15246.23 on Sept. 7, driven by shares of companies such as Cemex SA, the world third-largest cement producer, and Wal-Mart de Mexico SA, Latin America's largest retailer.
Cemex gained on expectation of increased demand for cement as areas of the Gulf Coast of the U.S. rebuild after Hurricane Katrina, said Carlos Hermosillo, an analyst with Vector Casa de Bolsa in Mexico City.
``It's the same theme of liquidity in the market coupled with good news in the national economy, especially inflation,'' he said of the Bolsa's gain.
Mexico's annual inflation rate fell to the lowest on record in August, adding to expectations that the central bank will cut the benchmark lending rate.
Colombia's IGBC index fell 1.3 percent to 6,824.34. The market fell on concern that shares have risen higher than their prospects warrant, said Javier Gomez, head analyst at Interbolsa brokerage in Bogota. Even after the decline, the IGBC has risen 39 percent in 90 days, the biggest gain among 79 global indexes tracked by Bloomberg.
``We had seen the market rally with news of mergers in the past months and now with talk on it being overvalued, investors are selling,'' Gomez said.
Argentina's Merval fell, while the Peruvian main index rose. The main indexes in Chile and Venezuela were little changed. Morgan Stanley's index of Latin American stocks rose 1.5 percent to 1929.14, making a 3.8 percent gain this week.
The following stocks made significant gains or losses in Latin American markets today. Symbols are in parentheses after the company name. In Brazil, the preferred share is usually the company's most-traded class of stock.
Brazil
Gerdau (GGBR4 BS), the second-largest U.S. maker of long- steel products such as wire, nails, concrete re-enforcing rods and I-beams for the construction industry, rose 60 centavos, or 1.9 percent, to 31.80 reais, for a 6 percent gain in the week. Demand for Gerdau's steel used in construction will increase for reconstruction in the path of Hurricane Katrina, said Claudio Monteiro, chief strategist at Fator Corretora, Brazil's second- largest stock brokerage.
Banco Itau Holding Financeira SA (ITAU4 BS), Brazil's biggest bank by market value, rose 6 reais, or 1.2 percent, to 526 reais. ``I'm still optimistic about the banking sector due to the prospect of increases in good quality credit,'' Thomazoni said. Itau purchased the right to administer salary accounts for employees of Sao Paulo, Valor Economico said, citing Executive Director Ronald Anton de Jongh. Itau paid 510 million reais ($220 million) to manage the 4.4 billion reais a year that go through the 210,000 individual accounts, the newspaper said.
Petroleo Brasileiro SA (PETR4 BS), Brazil's state-controlled oil company, rose 1.14 reais, or 3.5 percent, to 33.85 reais. The company will increase gasoline prices by 10 percent and diesel by 12 percent tomorrow, Petrobras said today after markets closed.
Centrais Eletricas Brasileiras (ELET6 BS), or Eletrobras, the country's largest power generator, rose 1.45 reais, or 4.5 percent, to 33.95 reais. The stock has fallen 13 percent this year, compared with a 12 percent gain of the Bovespa index.
Mexico
Wal-Mart de Mexico SA (WALMEXV MM), Latin America's largest Retailer, rose 2.08 reais, or 4.2 percent, to 51.47 pesos. The company said yesterday that same-store-sales rose for a sixth straight month in August. Sales at stores open 12 months or more rose 4.6 percent, the company said.
Cemex (CEMEXCP MM) rose 31 centavos, or 0.6 percent, to 54.95 pesos. U.S. and Mexican officials plan to meet in Washington next week to negotiate an end to tariffs on Mexican cement, which have averaged about 55 percent since 1990.
Vitro SA (VITROA MM), Mexico's largest glassmaker, rose 57 centavos, or 4.5 percent, to 13.37 pesos. As a result of increasing production to meet demand from Ford Motor Co.'s expansion of its Hermosillo plant, sales in Vitro's auto division will rise to $70 million in 2005, from $25 million last year, a Vitro spokesman said last month.
Desarrolladora Homex SA (HOMEX* MM), Mexico's largest homebuilder, rose 75 centavos, or 1.4 percent, to 54.86 pesos. Mexico's annual inflation rate fell to the lowest on record in August, adding to expectations that the central bank will cut the benchmark lending rate.
Colombia
Suramericana de Inversiones SA (SURAMIN CB), the nation's biggest insurance company, fell 280 pesos, or 2 percent, to 13,500 pesos.
Bancolombia SA (BCOLO CB), the nation's largest bank, fell 240 pesos, or 1.9 percent, to 12,480 pesos.
Chile
S.A.C.I. Falabella (FALAB CC), Chile's largest department store, rose 21 pesos, or 1.6 percent, to 1,351 pesos, the biggest gain on the IPSA index. The company reported last month that second-quarter earnings rose 45 percent.
LAN Airlines (LAN CC), Chile's biggest airline, fell 25 pesos, or 0.72 percent, to 3,455. LAN announced plans today to implement fuel surcharges of up to $60 a ticket, as record oil prices have driven up fuel costs $84 million in the first half of the year, the company said in a statement.
source:bloomberg.com |
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