|
Latin American markets were mostly weaker today, as Brazil posted a more meaningful decline than yesterday. A combination of surging oil prices, profit-taking and political tensions pressured Brazil.
Argentina also receded, as the country's financial reports continue to trickle in. Meanwhile, Mexico advanced alongside a late-day rally in the U.S.
Brazil's benchmark Bovespa Index tumbled 483.80 points, or 1.78%, while Mexico's benchmark Bolsa Index advanced 66.37 points, or 0.45%. Argentina's Merval Index declined 12.64 points, or 0.84%.
Brazilian issues staged another pullback today, deeper than yesterday, as a combination of profit-taking and surging oil prices dictated trading direction.
Brazil, a net importer of oil, saw crude oil prices close well above US$ 65 a barrel, a fresh record high. Also, earnings releases continue to capture market focus.
Meanwhile, investors are also closely monitoring Brazil's political climate. The Senate approved a 28% increase in the minimum wage, a move that runs counter to President Luiz Inácio Lula da Silva's wishes.
If the increase is approved by the lower house, 12 billion reais could be lost from public spending. Some investors noted the ongoing political scandal may have weakened the position of President Lula's governing Workers Party.
CVRD said that higher prices for iron ore and pellets supported a surge in the firm's second-quarter net profits to 3.48 billion reais from 1.68 billion reais a year ago, as gross operating revenue climbed to 10.05 billion reais from 7.37 billion reais last year.
EBITDA, meanwhile, totaled 5.33 billion reais, compared with 3.38 billion reais. Separately, yesterday, the country's Anti-Trust Council ordered the firm to give up a preferential purchase option for iron ore at one of CSN's mines, a decision that CVRD said it may appeal.
The council said CVRD must also reduce its stake in MRS Logistica or give up its veto power over key decisions by MRS Logistica's board.
Within the financial group, Unibanco posted a second-quarter profit of 453 million reais, a 48.5% leap from the 305 million reais posted a year ago. Brazil's third-largest private bank credited restructuring efforts with the rosier result. Operating profit rose to 684 million reais from 401 million reais.
Flat-steel producer Usiminas said that its net profit for the second quarter rose to 810 million reais from 528 million reais, on higher revenue of 3.49 billion reais versus 2.77 billion reais. Still, the most recent profit figure landed below market expectations and the first-quarter result, as the global decline in steel prices took a toll.
Mexican shares were resilient against a broader regional downturn. Investors are awaiting tomorrow's Bank of Mexico meeting, in which it is widely expected monetary policy will remain unchanged.
Grupo Mexico continued to power higher on yesterday's announcement that its U.S. unit, Asarco, filed for bankruptcy protection. The move could take some financial pressure off of Grupo Mexico.
In economic news, industrial production rose a less-than-expected 0.7% in June from a year ago, and declined 1.16% from May. The Finance Ministry said that manufacturers were negatively impacted by a slowdown in the auto sector.
Argentina turned lower, as investors digested the country's latest corporate earnings reports. Also, consumer confidence leapt 3.1% in August from July to 52.1, following four-straight monthly declines.
Fixed-line phone provider Telecom Argentina swung to a second-quarter profit of 179 million pesos, reversing a year-earlier loss of 350 million pesos. Net sales advanced to 1.35 billion pesos from 1.05 billion pesos.
Thomson Financial Corporate Group - www.thomsonfinancial.com
 |
Subscribe to this comment's feed
The small, coastal town of Condé is located just a twenty minute's drive from João Pessoa, the capital of Paraíba. The Northeast of Brazil has historically been a place of encounter and mixing between peoples. For millenia groups of indigenous people fished, farmed, migrated and sometimes fought along this large, fertile area. 
The Brazilian diplo-MÁ-cia (bad diplomacy) carries on its accelerated course towards the non-acknowledgment of human rights, although sometimes it takes pleasure in saying that it does precisely the opposite. The visit of Iran's president, Mahmoud Ahmadinejad, is another example of a diplomatic omission that verges on hypocrisy. 
On July 4, 2006, representatives of Argentina, Brazil, Paraguay and Uruguay met in Caracas to sign the protocol for the entrance of Venezuela into the Southern Common Market (Mercosur). After two and a half years, the protocol was approved by the legislative bodies of Argentina and Uruguay, and as of now it may be only days away from being ratified by the continent's economic megalith, Brazil. 
Some sectors of the fight against AIDS have suggested that Thabo Mbeki, the former president of South Africa, committed genocide through his absence from the fight against the illness in his country throughout his two terms. 
One hundred and eleven years after Brazil abolished slavery, the number of workers deprived of their freedom is still huge. They raise cattle, produce charcoal, sugar cane or timber. Some of them, most undocumented Bolivians, work in basements of small apparel factories in São Paulo and other metropolis. 
On November 7, 2009 a few friends and I had an opportunity to take a look inside a Brazilian jail outside the city of Rio de Janeiro. We were able to take some amateur footage of our experience on video (see link below). It's no surprise, of course, that the typical Brazilian jail lacks some of the functionality of those in North America or Europe, but our experience that day was quite shocking. 
Depletion of the Amazon Rainforest is not a new concern facing environmentalists, biologists, ecologists, and a growing number of the Amazonian indigenous peoples. For decades they have feared for the fate of the world's most biologically diverse and species-rich hothouse. 
Geisy Arruda made history this week in Brazil, but for all the wrong reasons. What began as a poorly planned fashion statement has become a worldwide tale. Geisy decided to wear a pink mini-dress to her private college in São Paulo state, and after that, all hell broke loose. 
The push of vigilante groups in Rio de Janeiro's favelas (shantytowns) in the last three years is the most important and alarming information of the just-released study by the Rio de Janeiro University's Violence Research Center (Nupev-Uerj). 
A dispute over drug trafficking territory in Rio de Janeiro has intensified lately, leaving in its wake unprecedented acts of violence, such as the downing of a police helicopter in the northern zone of the city on October 17. Three policemen died and another two were injured. This event has drawn the attention of the international media, who are raising the issue of public security for the 2016 Olympics to be held in Rio.