LATIN AMERICAN MARKETS: Telecoms Lift Brazil Stocks; Capital
Flows Debated
By Laura Mandaro
A rally in telecom stocks lifted Brazilian shares Thursday, while
speculation the country could tweak its strategy of tamping foreign inflows
supported the real.
Mexican, Chilean and Argentine indexes also took part in broad rally across
both North and South America.
Brazil's Bovespa index gained 467 points, or 0.7%, to 64,380, boosted by gains
in telecoms carriers Vivo Participacoes (VIV) and TIM Participacoes (TSU).
Brasil Telecom Participacoes shares also gained in Sao Paulo.
Vivo's U.S.-listed shares gained 5.2% after the cell-phone operator said its
profit in the third quarter more than doubled, helped by lower operating costs
and slightly higher services revenue.
Petrobras (PBR) shares gained 1.7% after the state-controlled oil company said
it had bought Chevron Chile S.A.C., which produces and sells the Texaco brand of
lubricants in Chile.
Brazil's real currency edged up against the U.S. dollar. One U.S. dollar
bought 1.714 reals, down about 0.2% for the day.
Giving the currency a lift, said Brown Brothers Harriman currency strategist
Marc Chandler, were local press reports saying Brazilian officials are
evaluating other measures to slow capital inflows - including the government
selling a Brazil-denominated bond issue to foreign investors.
Last month, Brazil's government said it was imposing a 2% on foreign purchases
of Brazilian bonds and stocks in a move to slow a wave of investments that have
driven up stock prices but also made its currency more expensive, a risk to its
exports.
The currency has gained about 35% this year. It tumbled when the government
announced its decision to impose capital controls on Oct. 20 but has since
stabilized to roughly the same levels before the announcement.
"Perhaps most important for foreign investors though is the talk that
officials may change the rules and allow investors to deposit guarantees
overseas," Chandler wrote.
Mexico's IPC index gained 1.1% to 29,765, led by modest gains manufacturing
and industrial firms' shares.
Chile's IPSA edged up 2 points to 3,349.
On Wall Street, stocks rallied broadly on a drop in U.S. weekly jobless claims
and optimistic comments about the economy from Cisco Systems' (CSCO) chief
executive. The Dow Jones Industrial Average (DJI) rose 165 points, or 1.7%, to
9,967, coming close to the 10,000 level.
Oil prices slid 0.5% to $80 a barrel. Copper prices also faltered.
(END) Dow Jones Newswires
11-05-091308ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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