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Bolsa Index Rises on Mexico Cabinet Appointments: Latin Stocks
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By William Freebairn and Alexander Ragir
Nov. 24 (Bloomberg) -- Mexico's main stock index had a fourth weekly gain on expectations government ministers named by President-elect Felipe Calderon will help the economy and keep corporate profits growing.
The Bolsa index rose 62.88, or 0.3 percent, to a record 24,792.89. Mexican shares rose 2.5 percent on the week, led by retailer Wal-Mart de Mexico, and have gained for seven of the past eight weeks. In Brazil, the Bovespa index fell 312.11, or 0.7 percent, to 41,757.72, paring its weekly gain to 1.8 percent.
``What we're seeing this week is primarily a response to the naming of Calderon's cabinet,'' said Carlos Hermosillo, senior analyst at Vector Casa de Bolsa in Mexico City.
Calderon, who takes office Dec. 1, named his economic ministers Nov. 21 and filled education, health and agriculture cabinet posts today. The individuals chosen by Calderon have given investors confidence that corporate profits will continue to grow, even as the economy slows, Hermosillo said.
He estimated corporate profit growth will outpace the expected 3.5 percent expansion in the economy next year.
The political news took on greater importance as trading volume was lower than usual this week because of a holiday Monday in Mexico and the Thanksgiving holiday yesterday in the U.S., Hermosillo said.
Brazil's Bovespa index fell from a record, led by Tele Norte Leste Participacoes SA, on concern the market may be slow to adopt equitable treatment of shareholders, after the company delayed a vote to reorganize shares.
Telemar postponed a capital reorganization vote today because too few minority shareholders registered for the meeting, said Valmir Celestino, who manages 1.8 billion reais ($830 million) of Brazilian stocks for Banco Safra de Investimentos SA. The vote scheduled for Monday will be a ``signal'' to the market on whether attempts in Brazil to combine preferred and common shares into one voting unit will be successful in the future.
``If the vote doesn't pass, common shares, in general, will tend to fall and preferred share, especially Telemar's, will tend to rise,'' said Celestino.
The Bovespa rose to a record 42,069.83 yesterday, as U.S. markets were closed for the Thanksgiving holiday, on the lowest daily volume this month.
Police were called to the stock exchange this afternoon after a man forced his way in and threatened to detonate a bomb, Band television station reported. The man was apprehended and taken away in an armored vehicle without incident, according to images broadcast by Band.
Elsewhere in Latin America, Colombia's index fell while those in Peru, Argentina and Venezuela rose. Chile's index was little changed. The Morgan Stanley Capital International index of Latin American shares fell 0.3 percent to 2782.22, for a 1.7 percent gain for the week.
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
Centrais Eletricas Brasileiras SA (ELET3 BS), or Eletrobras, the state-controlled electricity holding company, fell 1.00 reais, or 2.1 percent, to 47.85 reais. Yesterday Eletrobras shares rose 7.4 percent.
Cia. Energetica de Minas Gerais (CMIG4 BS), or Cemig, fell 2.64 reais, 2.6 percent, to 97.21 reais.
Lojas Americanas SA (LAME4 BS), a retailer, rose 4.70 reais, or 4.7 percent, to 104.70 reais. Yesterday Lojas fell 8.3 percent on plans to purchase Submarino SA (SUBA3 BS), an Internet retailer. Submarino shares rose 4.19 reais, or 6.9 percent, to 64.99 reais, adding to a 16 percent gain yesterday.
Tele Norte Leste Participacoes SA (TNLP4 BS), or Telemar, fell 1.14 reais, or 3.4 percent, to 32.46 reais. Investors in the company will be given a chance Monday to vote on a plan to convert preferred shares into common stock as part of a company reorganization. The vote was postponed from today. Common shares (TNLP3 BS) of the company, also known as Telemar, fell 3.24 reais, or 4.5 percent, to 69.65 reais.
Mexico
Grupo Aeroportuario del Pacifico SA (GAPB MM), the operator of 12 Mexican airport, rose 2 pesos, or 4.8 percent, to 43.60 pesos. IXE Grupo Financiero initiated coverage of the stock with a ``buy,'' citing growing demand for air travel in Mexico. U.S. shares may trade at $46.10 in 12 months, the analysts said in an unsigned research report dated Nov. 21 and e-mailed today. Deutsche Bank analyst Daniel Mcgoey also initiated coverage with a ``buy'' recommendation, on Nov. 20. American depositary receipts (PAC US) rose $1.15, or 3 percent, to $39.35.
Kimberly-Clark de Mexico SA (KIMBERA MM), Mexico's largest producer of paper goods for consumers, rose 80 centavos, or 1.7 percent, to 48.80 pesos. The paper-maker said yesterday it would pay a special dividend of 2.50 pesos a share on Nov. 30.
Wal-Mart de Mexico SA (WALMEXV MM), Latin America's largest retailer, rose 51 centavos, or 1.3 percent, to 40.38 pesos. The company on Nov. 22 received final approval to open a bank.