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 Business News | December 2007 
Mexico's Bolsa Advances on U.S. Rates, Economy: Latin Stocks
 William Freebairn & Alexander Ragir - Bloomberg
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Mexico's Bolsa index rose for a seventh day, its longest winning streak since March, on speculation a Federal Reserve interest rate cut and a growing economy in the U.S. will spur demand in the biggest market for Mexican exports.
Mexico's Bolsa index rose 722.39, or 2.4 percent, to 30,721.18 as of 12:50 p.m. in New York, led by mobile-phone company America Movil SAB. Brazil's Bovespa index of the most-traded shares on the Sao Paulo exchange rose 1,570.56, or 2.5 percent, to 65,052.09.
"All that noise over subprime and uncertainty over whether the Fed would cut has sort of passed and sentiment is settling down," said Manuel Lasa Lasa, who helps manage 1.2 billion pesos ($110 million) in stock at Interacciones Casa de Bolsa.
Mexican shares had declined more than other emerging market equities on concern subprime mortgage losses would slow growth in the U.S., which buys about 80 percent of Mexico's exports. Reports today showed the U.S. added three times as many jobs in November as economists had forecast and that the Institute for Supply Management's index stayed above 50, showing growth continues.
"Investors are reacting to the under-valuation and the latest economic indicators in the U.S.," Lasa said in a telephone interview in Mexico City.
UBS AG analysts Oussama Himani and Stephen Mo said Dec. 3. that Mexican shares are their "top pick" in Latin America.
America Movil, Latin America's largest mobile-phone company and the stock with the heaviest weight in the index, rose 2.7 percent to 35.25 pesos after Chief Financial Officer Carlos Garcia Moreno said the is seeking acquisitions outside Latin America.
Latin American stocks climbed as Fed fund futures showed that traders expect the Fed to cut its benchmark lending rate by at least 0.25 percentage point at its Dec. 11 policy meeting.
Domino Effect
Rate cuts in the U.S., Europe or Japan would increase the likelihood that developing nations will cut borrowing costs, or do so more quickly, said Nudgem Richyal at Baring Asset Management in London.
"They're setting global rates," said Richyal, who helps manage $42.2 billion, including Brazilian stocks. "Countries like Brazil are already humming along quite nicely. It's just an extra shot of adrenaline for them."
Brazil's Bovespa advanced for a seventh day, its longest streak of gains since August, led by Petroleo Brasileiro SA, as oil prices gained in New York.
Cia. Vale do Rio Doce, the world's largest iron ore producer, rose 2.6 percent to 53.67 reais.
Brazil's central bank will probably keep the benchmark interest rate unchanged today for a second meeting, according to all 36 analysts surveyed by Bloomberg.
In other Latin American markets, the main indexes in Argentina, Chile, Colombia and Peru rose. Venezuela's General Index fell. The MSCI EM Latin America Index rose 3 percent to 4,441.53.
To contact the reporters on this story: Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net ; William Freebairn in Mexico City wfreebairn(at)bloomberg.net.
Mexico's Homex Shares Skyrocket on Revenue Outlook
Reuters
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Mexico City - Homex (HOMEX.MX) shares jumped more than 8 percent on Wednesday after the Mexican home builder gave a rosy outlook for 2008 revenue growth.
The stock rose 8.28 percent to 90.90 pesos after the company said late on Tuesday that it expected revenue to increase 16 percent to 18 percent next year, beating rivals' forecasts in the buoyant housing sector.
On the New York Stock Exchange, Homex (HXM.N) rose 9.4 percent to $50.31.
Homex also forecast EBITDA margin of 24 percent to 25 percent next year. EBITDA is earnings before interest, taxes, depreciation and amortization.
Chief Executive Gerardo de Nicolas said Homex would gain market share in 2008, with rivals like Geo (GEOB.MX), Urbi (URBI.MX) and Ara (ARA.MX) all having slightly lower revenue growth forecasts for next year.
Urbi has forecast sales growth of 16 percent; Geo, 12 percent to 14 percent; and Ara, 10 percent.
Merrill Lynch, which has a "buy" recommendation on Homex's stock, said it was its top pick in Mexico.
"Its unparalleled geographic diversification and a solid management that has delivered solid growth without missing one single quarter since they became public in 2004 support our strong conviction that Homex will again deliver on its 2008 guidance," Merrill Lynch said in a note.
Homex's gains injected life into other stocks in the housing sector.
Ara rose 4.07 percent to 11.25 pesos, Geo moved up 3.92 percent to 34.46 pesos and Urbi increased 3.52 percent to 39.45 pesos. (Reporting by Chris Aspin) |
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