Brazil's Gerdau, Embratel; Mexico's Wal-Mart: Latin Stocks

By Carlos Gamez

Mexico City, April 29 (<a href=quote.bloomberg.com>Bloomberg) -- Latin American stocks gained, with Brazil's main index climbing to its highest level in 10 months, on expectations the Brazilian central bank will cut interest rates next month, helping boost consumption and spark growth in South America's biggest economy.

Brazil's Bovespa index of the most-traded stocks on the Sao Paulo Stock Exchange gained 1.7 percent to 12,678.73 at 1:32 p.m. New York time, the highest intraday level since June 3. Mexico's benchmark Bolsa index climbed 74.46, or 1.1 percent, to 6502.66, the highest intraday level since July 9.

Shares of Gerdau SA, Latin America's biggest steelmaker, are heading for their biggest one-day gain since Feb. 12 after reporting first-quarter profit more than doubled to 287.3 million reais ($97.8 million) from the year-before period.

Sectors that are strongly tied to the domestic situation are the ones to benefit the most'' from a rate reduction, said Graham Makohoniuk, who helps manage about $650 million in Latin America equities with Globalvest Management Co. in St. Thomas, Virgin Islands. Gerdau, because it's in the construction business, will benefit.''

In other markets, stocks in Argentina, Chile, and Venezuela climbed, while the main equity indexes in Colombia and Peru were little changed.

The following stocks are having 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) rose 1.75 real, or 5.3 percent, to 34.75 reais.

Embratel Participacoes SA (EBTP4 BS), the country's largest long-distance telephone company, rose 12 centavos, or 2.5 percent, to 4.86 reais. A 22 percent gain in the real against the dollar this year reduces servicing costs of Embratel's debt, which is almost all due in foreign currency.

Klabin SA (KLBN4 BS), Brazil's largest papermaker, jumped 4 centavos, or 1.9 percent, to 2.14 reais, after the company said first-quarter earnings soared to 62 million reais from 7.6 million reais in the same period last year.

Tele Norte Leste Participacoes SA (TNLP4 BS), the country's largest telephone company, rose 70 centavos, or 2.3 percent, to 31.7 reais, adding to a 4.7 percent gain yesterday.

Mexico

America Movil SA (AMXL MM), Latin America's largest wireless company, gained 14 centavos, or 1.6 percent, to 8.81 pesos. The company said last week its first-quarter profit doubled to 3 billion pesos (290 million) from 1.5 billion pesos in the year-earlier period.

Grupo Financiero BBVA-Bancomer SA (GFBBB MM), Mexico's largest bank, climbed 12 centavos, or 1.4 percent, to 8.98 pesos. Spanish bank Banco Bilbao Vizcaya Argentaria SA's profit from its stake in Bancomer is expected to rise 16 percent in the first quarter to 116 million euros ($106 million), according to Jose Luis de Mora, a Merrill Lynch & Co. analyst. BBVA-Bancomer is expected to release earnings today after the market closes.

Organizacion Soriana SA (SORIANAB MM), a supermarket chain owner and operator, fell 12 centavos, or 0.6 percent, to 18.5 pesos after reporting its first-quarter profit fell 9 percent to 320 million pesos (31 million) from the previous year. Revenue rose 3 percent to 7.8 billion pesos from 7.6 billion pesos in the year- earlier period.

Vitro SA (VITROA MM), Mexico's largest glassmaker, fell 9 centavos, or 1.2 percent, to 7.41 pesos. The company said after markets closed yesterday it had a first-quarter net loss of 221 million pesos because of weak consumer spending in the U.S., one of its largest markets, and lower sales of automobile and construction glass in Mexico.

Wal-Mart de Mexico SA (WALMEXV MM), Mexico's largest retailer, gained 90 centavos, or 3.2 percent, to 28.68 pesos. Shares have gained 22 percent this year.

Argentina

Perez Companc SA (PC AR), Argentina's second-biggest energy company, rose 3 centavos, or 1.5 percent, to 2.1 pesos. Argentina's antitrust agency approved the sale of Perez Companc to Petroleo Brasileiro SA, Brazil's state-controlled oil company, El Cronista daily newspaper said.

Telecom Argentina Stet-France Telecom SA (TECO2 AR), the country's second-biggest phone company, rose 14 centavos, or 4.9 percent, to 2.98 pesos, after falling 9.3 percent yesterday.

Colombia

Banco de Bogota SA (BOGOTA CB), the flagship of the Aval banking group, rose 100 pesos, or 1.3 percent, to 7,700 pesos. The bank said its first-quarter profit surged 33 percent to 61 billion pesos ($21 million) from a year earlier.

Corporacion Financiera Suramericana y Nacional SA (CORFINS CB), which provides investment-banking services in Colombia, declined 49 pesos, or 2.1 percent, to 2,315 pesos. The stock price has doubled in the last 12 months.

Valores Bavaria SA (VALBAVA CB), Colombia's largest diversified holding, fell 2, or 1.7 percent, to 119. The company is expected to narrow its losses in the first quarter, traders said. The stock has declined 36 percent in the last 12 months.

Venezuela

CA Telefonos de Venezuela (TDV/D VC), the country's largest publicly traded telephone company, rose 55 bolivars, or 2.4 percent, to 2365 bolivars. The company said yesterday that its free cash flow this year will be between $370 million and $475 million. The company is committed to paying out half of the cash in dividends. Last Updated: April 29, 2003 13:36 EDT