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LATIN AMERICAN MARKETS: Brazilian, Mexican Equities Gain Ground After Sharp Sell-offs |
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| Friday July 25th, 2008 / 22h01 |
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By Carla Mozee
Major Latin American markets rose Friday, with Brazilian equities trying but unable to claw back from a bear market and Mexican stocks up after reaching a seven-month low in the previous session.
Brazil's Bovespa closed down 0.4% to 57,199.1. The benchmark index posted a XX% decline for the week.
Air carrier TAM (TAM) led advancers by rising 4.9%, and rival Gol (GOL) gained 3.8%, as crude-oil futures closed down more than $2 to $123.26 a barrel.
Crude prices are down more than $22 since their July 11 high, and the decline has allowed shares of TAM and Gol to soar 29% and 26%, respectively, during that period.
Shares of state-run oil giant Petrobras (PBR) fell 0.4%. The company has asked members of the oil workers union to continue talks about a profit-sharing deal, according to media reports. If a deal can't be reached, the union could launch a nationwide strike next month.
Earlier this month, workers at Petrobras' key Campos Basin platform staged a five-day work stoppage. The company said production levels weren't affected by the action.
Shares of mining firm Vale (RIO) fell 0.5%. Steel stocks continued to fall, led by a 3.8% decline in shares of Usiminas.
The Bovespa fell 3.3% on Thursday. The move represented a 22% fall from the index's all-time high on May 20, and a bear market is reached with a drop of 20% from highs.
The sell-off followed a larger-than-expected hike in the country's key interest rate by the central bank, to 13%. Rate policymakers are trying to curb rising inflationary pressures stemming from strong domestic demand and a climb to historically high prices for commodities.
Mexico's IPC index rose 0.8% to 27,084.7, following Thursday's drop of 2.7% to its lowest level since Jan. 18. Stocks were weighed by a report of accelerating inflation in the first half of July and sharp drop in stocks on Wall Street.
The index slid 3.8% for the week.
On Friday, shares of Corporacion Geo climbed 5.1% after the home builder's report that second-quarter profit rose 11% to 432.3 million pesos ($42 million) on a 27% jump in sales to 4.62 billion pesos.
Banking firm Grupo Financiero Banorte was up 0.9%. The company on Thursday posted a 5% in profit for the second quarter to 1.81 billion pesos.
Stock in Axtel suffered a 4.1% loss after fixed-line operator posted results that were below analyst expectations. Its profit rose 38% to 240 million pesos on revenue of 2.93 billion pesos.
"In spite of Axtel's track record as a growth company, revenues and Ebitda actually declined" year over year, said analysts at Credit Suisse in a note Friday. "We believe revision of the company's full-year guidance is imminent." The broker currently has an outperform rating on Axtel.
Shares of Telefonos de Mexico (TMX) gained 0.3% while shares of wireless firm America Movil (AMX) rose 1.8%.
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| Friday July 25th, 2008 / 22h01 |
Source : Dowjones Business News |
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