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Moody Gives Brazil Thumbs Up PDF Print E-mail
Written by Jeremy Simon   
Wednesday, 12 January 2005

Brazilian shares rose, overcoming a larger-than-anticipated U.S. trade deficit. The U.S. trade gap widened 7.7% to a record US$ 60.30 billion in November from an upwardly revised US$ 56.00 billion in October.

Economists had expected a smaller deficit of US$ 53.60 billion in November. Brazil's benchmark Bovespa Index gained 139.73 points, or 0.57%. Shares rose, after Moody's Investors Service raised its outlook on the country's B1 credit rating to "positive" from "stable."

Moody justified the measure saying it was based on "a significant reduction" in the ratio of external debt to current account earnings.

The B1 rating is four notches below investment grade. The upgrade comes just three months after South America's leading economy rose one notch on the speculative-grade scale.

Turning to corporate items, Companhia Vale do Rio Doce advanced, after the iron ore firm and Germany's ThyssenKrupp said they hope to decide in the second half of this year on a plan to invest US$ 2.2 billion to construct a 4.4 million ton-per-year steel complex near Rio de Janeiro.

Also, Brazil's largest private bank, Banco Bradesco, said it has entered into an agreement to provide consumer credit for clients of medium-size retail bank Banco Panamericano.

Under the agreement, Bradesco will provide credit worth 7.2 billion reais. The deal marks the latest sign of fierce competition among Brazilian banks to increase consumer credit operations. Bradesco shares fell.

In other news, an analyst upgraded small Brazilian mobile phone companies Telemig Celular Participações, TIM Participações and CRT Celular to "buy" from "neutral," explaining that they have the lowest valuations of all the mobile stocks it covers globally.

Thomson Financial Corporate Group
http://www.thomsonfinancial.com/

PRNewswire

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