Stocks up in Argentina ; down in Brazil, Chile, Mexico, Venezuela

Friday, June 20, 2003
(06-20) 14:59 PDT MEXICO CITY (<a href=www.sfgate.com>AP) --

Mexican stocks closed flat to lower Friday, pressured my modest losses in the liquid shares of wireless phone carrier America Movil.

The market's key IPC index closed down 3.3 points, or 0.1 percent, to 7080.69 points, ending the week with a gain of 96 points. At the end of 2002, the IPC stood at 6127.09.

Volume was a light 79 million shares worth 685.2 million pesos, compared with Thursday's also thin 72.3 million shares worth 778.1 million pesos. Volume in the past two sessions has been well below the average turnover of 1.3 billion pesos so far this month. SAO PAULO, Brazil (AP) -- SAO PAULO (Dow Jones)--After being closed for the Corpus Christi holiday Thursday, Brazil's stock market saw a sell-off Friday as the local investors reacted to declines on overseas exchanges the previous day and talk that the country's development bank, the BNDES, could sell shares of local companies from its portfolio.

The main Ibovespa index ended Friday's session at 13,130, down 2.8 percent from Wednesday's close at 13,510 points. Trading volume was moderate with 587 million reals exchanging hands.

Investors reacted negatively to Thursday's declines on the New York indices, selling off shares early and continuing the trend throughout the day.

The market was also spooked by a looming congressional inquiry into allegedly irregular overseas remittances of US$30 billion. Investors fear the inquiry could hamper efforts at reforming the nation's money-bleeding social security program and unwieldy tax system. Some analysts believe the current profile of Brazil's pension and tax regimes contribute to the nation's risk profile.

Share prices also moved on word that the national development bank, or BNDES, may sell shares from its portfolio to boost its financial position in the wake of defaulted loan payments by U.S. power group AES Corp. BUENOS AIRES, Argentina (AP) -- Argentina's large-cap Merval Index broke through the 800-mark for the first time in five years Friday, as investors took heart from International Monetary Fund approval of the second review of January's debt rollover accord.

At the close of Friday's session, the Merval had picked up 18.26 points, or 2.3 percent, to close at 801.17 points. The broader General Index registered more tempered gains and was up 600.38 points, or 1.76 percent, at 34,556.80 points.

Trading volume reached a strong 111.4 million, as heavy buying pushed the Merval up by more than 3 percent at several points during the day.

Analysts said the latest day of rises was the result of a combination of general optimism about the economy and IMF approval of the second review. That approval opens the way for negotiations on a new, long-term debt rollover accord, the IMF has previously indicated.

"With this news, there is just a general feeling that the business climate of the country is improving," said Rafael Ber, senior analyst at Argentine Research.

The market was also lifted by the announcement from the government statistics agency late Thursday that the economy grew 5.4 percent in the first quarter from a year earlier - the first interannual rise since 1998. SANTIAGO, Chile (AP) -- Chilean shares on the Santiago Stock Exchange fell Friday for the third session in a row, with heavyweights Entel and D&S declining, on the background of a sharp retreat in Brazilian shares.

Chile's blue-chip Ipsa index slipped 0.7 percent to 1244.85 points from 1253.56 Thursday, as did the Inter-10 index of more liquid, internationally traded Chilean shares, which ended at 121.51 from 122.31.

Volume bounced back to 13.22 billion pesos from 8.89 billion.

Brazilian shares fell far faster than their Chilean peers. Brazil is often considered a barometer for sentiment toward South America.

However, the declines in Chile continued to be gradual, considering the market's near-30 percent surge this year. CARACAS, Venezuela (AP) -- Venezuelan shares ended slightly lower Friday, with the IBC General Stock Index losing 0.1 percent to close at 13,681 points.

The exchange's biggest stock, CA Nacional Telefonos de Venezuela, which accounts for 40 percent of the IBC, ended 25 bolivars lower at 4750 bolivars.

CANTV has found buyers after a decision by the company's transfer agent to resume converting local shares to American Depositary Receipts.

The process was suspended in February when the government imposed currency controls to protect reserves severely affected by a two-month general strike that began Dec. 2, 2002.

The transfer agent resumed the conversions after it received clarification the process wasn't against the new rules, officials said.

Some investors are converting CANTV shares to ADRs, and selling them in the U.S. as an alternative to buying the greenback on the black market, traders said.