Stocks continue to rise in Mexico, Brazil, Argentina, Chile

Wednesday, May 28, 2003
(05-28) 16:41 PDT MEXICO CITY (<a href=www.sfgate.com>AP) --

Mexican stocks rose for the second day in a row Wednesday, helped by positive U.S. markets and record low domestic interest rates.

The local stock market's key IPC finished up 17.04 point, or 0.3 percent, at 6,667.35. Volume was a solid 115.2 million shares worth 1.63 billion pesos.

The Valmex brokerage said in a report that optimism in the United States, mostly over the medium-term economic outlook, was helping U.S. shares, and Mexico was catching it.

The drop in local domestic interest rates at Tuesday's primary auction was also a factor helping stocks.

The rate on benchmark 28-day Treasury bills or Cetes, fell 0.44 percentage point to 4.91 percent, one basis point above the record low set two weeks ago.

With fixed income returns at minimal levels, "the opportunity cost of being in the stock market is very low, which is an additional reason for investing," Valmex said.

Accounting for much of Wednesday's volume, market bellwether Telmex L shares rose 0.1 percent to 15.66 pesos, and banking group BBVA-Bancomer B shares rose 0.6 percent to 9.04 pesos.

Telecommunications heavyweight America Movil L shares slipped 0.5 percent to 9.24 pesos.

SAO PAULO, Brazil (AP) -- Brazil's stocks climbed slightly Wednesday for a second consecutive session on continued signs of easing inflation and improved prospects for pension and tax reform.

The Ibovepsa index ended with 13,294 points, up 0.4 percent from Tuesday's close of 13,246 points. Volume was a moderate 742 million reals.

Investors reacted warmly to news of easing price increases over the past month, which moved the index up more than 1 percent just after the opening bell. Later, investor enthusiasm waned as markets around the world showed only modest gains.

News of a political alliance meant to push through much-needed changes to Brazil's pension and tax systems also cheered investors. Late Tuesday, the leading Democratic Movement Party, or PMDB, agreed to join President Luiz Inacio Lula da Silva's Workers' Party in what looks to be a difficult fight to implement reform.

Additionally, the market is anxiously anticipating Thursday's release of Brazil's first-quarter gross domestic product performance. A Dow Jones Newswires survey of 15 economists generated a consensus estimate for seasonally adjusted GDP growth of 0.6 percent, though some expect a negative result.

BUENOS AIRES, Argentina (AP) -- Argentine stocks climbed Wednesday to break the five-year high reached one month ago as the market registered growing confidence over fledgling President Nestor Kirchner's ability to lead the country's economic recovery.

The large-cap Merval Index gained 2.1 percent, or 13.72 points, to end at 678.03 points, while the broader General Index climbed 1.9 percent, or 579.73 points, to 30,551.76.

Wednesday's level surpassed the Merval's five-year high set April 23. Analysts said the market is embracing the early policy initiatives that have come from Kirchner's administration during his first week in office.

Volume traded was 52.7 million pesos.

Steel firm Acindar was the day's strongest performer, gaining 5 percent to end at 2.32 pesos. The promise of the massive public works project has buoyed the company's shares in recent weeks.

Privatized utility companies also posted gains Wednesday, with Telecom Argentina rising 4.5 percent to 3.23 pesos and Transportadora de Gas del Sur climbing 3.8 percent to 1.62 pesos. A review of public service contracts has been marked as a priority for de Vido's newly created cabinet ministry.

SANTIAGO, Chile (AP) -- Share prices on the Santiago Stock Exchange closed higher Wednesday, helped by gains in airline LanChile and Coca Cola bottler Andina and supported by gains of Wall Street share prices.

Chile's blue-chip Ipsa index ended up 1.6 percent at 1,224.38 points. The Inter-10 index of more liquid, internationally traded Chilean shares matched the 1.6 percent gain by rising to 119.44. Volume skyrocketed to 23.22 billion pesos.

Top gainers included Andina, whose B-shares surged another 5.2 percent to 1,030 pesos on continued speculation it might buy Peruvian peer Embonor.

Airline LanChile topped blue-chip gainers, rising 6 percent to 1,150 pesos, while Banco Santander Santiago extended Tuesday's 1.8 percent gains by 2.9 percent to 14.30 pesos.

Utilities holding Enersis continued going the other way, giving up 2.8 percent to 61.50 pesos in profit-taking.

CARACAS, Venezuela (AP) -- Venezuelan shares ended higher Wednesday even though the market's biggest stock, CA Nacional Telefonos de Venezuela, or CANTV, lost 1.7 percent as investors took recent profits.

The IBC General Stock Index, of which CANTV accounts for 40 percent, closed 3.8 percent higher at 11,532 points, continuing to a new seven-year high.

A 20 percent rise in financial conglomerate Mercantil Servicios Financieros helped the IBC overcome CANTV's slight loss. Mercantil's A shares ended at 1,710 bolivars.