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 Business News | November 2006 
Mexican Bolsa Gains on Cabinet Appointments
 William Freebairn & Alexander Ragir - Bloomberg
| | The Mexican Stock Exchange |
Mexican stocks rose for the first day in three, surging to a record on confidence the government will restrain spending and lure investment after President-elect Felipe Calderon named his economic team.
The Bolsa index rose 389.63, or 1.6 percent, to 24,585.68. Brazil's Bovespa index rose 540.97, or 1.3 percent, to 41,570.40.
Calderon named Agustin Carstens, former deputy managing director of the International Monetary Fund, as finance minister. He also named heads to five ministries including economy, energy and labor, saying the team will help stabilize spending and stimulate investment.
"It was very positive, as the announcement wasn't expected until closer to the end of the month," said Jaime Ascencio, an economist with investment fund Actinver SA in Mexico City. Calderon's inauguration is scheduled for Dec. 1.
The timing of the announcement was well-planned, coming a day after Calderon's opponent in the campaign for president, Andres Manuel Lopez Obrador, held a rally and declared himself the legitimate president, Ascencio said. Lopez Obrador claimed fraud in the election, which Calderon won by 0.6 percent of the vote.
Gains on the Bolsa were led by America Movil SA, Latin America's largest mobile-phone company, which rose 3.3 percent after Blackrock Inc. fund manager William Landers recommended the stock in an interview yesterday. Markets in Mexico were closed for a holiday yesterday.
In Brazil, stocks rose as low global inflation and interest rates spurred demand from foreign investors for riskier emerging market stocks, analysts said.
"Equities worldwide have rallied hard, reflecting this increase in risk tolerance," UBS analysts William Darwin and Jennifer Delaney wrote in a report. When appetite for risk rose to similar levels in the past, it signaled a drop in prices, as occurred in May, they wrote. The Bovespa fell almost 22 percent from May 9 through June 13 amid a global rout of emerging market stocks.
Blackrock's Landers, who helps manage $4 billion of Latin American assets, said Brazil is his recommended market in the region. The benchmark index, fewer than 700 points shy of its May 9 record close of 41,979.29, climbed 18.3 percent the past two months.
The main stock indexes in Argentina, Chile, Peru and Venezuela rose, while Colombia's index fell. The Morgan Stanley Capital International Index of Latin American shares rose 1 percent to 2767.77.
The following are the most-active stocks in Latin American markets today. In Brazil, the preferred share is usually a company's most-traded class of stock.
Brazil
Cia. Siderurgica Nacional SA (CSNA3 BS) a Brazilian steelmaker, fell 1.30 reais, or 2 percent, to 63.81 reais. Merrill Lynch analyst Marcelo Aguiar lowered his rating on the shares to "neutral" from "buy."
Vivo Participacoes SA (VIVO4 BS), a joint venture of Portugal Telecom and Telefonica SA, rose 45 centavos, or 5.4 percent, to 8.80 reais. Should Sonaecom SGPS SA succeed in its hostile 10.7 billion-euro ($13.7 billion) offer for Portugal Telecom, Sonaecom is open to selling Vivo to Telefonica, Sonaecom Chief Financial Officer Chris Lawrie reiterated on Nov. 17 at a technology and media conference arranged by Morgan Stanley in Barcelona, Spain. Telefonica also owns about 10 percent of Portugal Telecom.
Cia. Vale do Rio Doce (VALE5 BS) rose 1.11 reais, or 2.3 percent, to 49.28 reais. Landers, of Blackrock, recommended Vale in the interview yesterday.
Banco Bradesco SA (BBDC4 BS), Brazil's largest non-state bank by assets, fell 15 centavos, or 0.2 percent, to 82.50 reais. Bradesco Chief Executive Marcio Cypriano said in an interview on Nov. 14 that he expects to increase loans to consumers and companies by at least 20 percent in 2007 as interest rates fall and economic growth quickens.
Mexico
America Movil SA (AMXL MM), Latin America's largest mobile- phone company, rose 79 centavos, or 3.3 percent, to 24.41 pesos. Blackrock's Landers recommended the shares in the interview yesterday. America Movil's Brazilian unit led competitors in the number of new customers during October, Morgan Stanley analyst Vera Rossi said in a report.
Grupo Mexico SA (GMEXICOB MM), the world's seventh-largest copper producer, rose 1.69 pesos, or 4.6 percent, to 38.09 pesos. Copper gained the most in five weeks, as futures for March delivery rose 2.2 percent to $3.1475 a pound on the Comex division of the New York Mercantile Exchange.
To contact the reporters on this story: William Freebairn in Mexico City wfreebairn@bloomberg.net; Alexander Ragir in New York at at aragir@bloomberg.net |
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