Latin stocks fell for a third day as a decline in oil prices raised concerns that profits will be less than expected at Petroleo Brasileiro SA and Mexican companies dependent on government oil revenue.
The Morgan Stanley Capital International index of Latin American shares dropped 1.6 percent, to 2,959.63. The Bovespa Index of the most-traded stocks on the Sao Paulo exchange lost 838.86 points, or 1.9 percent, to 43,573.49. Petrobras, as Brazil's state- controlled oil company is known, accounted for about 179 points of the drop in the Bovespa.
``The fall of 1.6 percent in oil futures influences the price of Petrobras, which helps bring down the market,'' said Ricardo Goncalves, who helps manage 400 million reais at BI Asset Management in Sao Paulo.
Mexico's Bolsa index fell 211.66, or 0.8 percent, to 26,834.05, on concerns that lower oil prices and falling production will force cutbacks in government spending on housing and infrastructure. Mexico's government-owned oil company provides one third of the revenue to the state.
Daily oil output at the nation's largest oil field, known as Cantarell, fell by one quarter during 2006, the Wall Street Journal reported today.
``Cantarell is falling much more than expected,'' said Rodolfo Navarrete, head of equity research at Vector Casa de Bolsa in Mexico City.
Crude oil for March delivery fell $1.41, or 2.5 percent, to $54.01 a barrel on the New York Mercantile Exchange, the lowest since Jan. 22, on speculation that U.S. fuel inventories are adequate to meet increased heating demand during the next two weeks.
Shares of Grupo Mexico SA, the world's seventh-largest copper producer, fell after copper prices had their biggest one-day drop in four weeks. Grupo Mexico's Mexico-traded shares fell for the first day in seven, dropping 16 centavos, or 0.4 percent, to 44.69 pesos, after rising to a record 45 pesos on Jan. 26.
The company on Jan. 26 said net income jumped 50 percent to $447.3 million from $298.3 million a year earlier. Sales rose 37.4 percent to $1.88 billion, after copper prices rose 57 percent to an average $3.19 a pound from $2.03.
``The drop in shares is due more to the slump in copper prices than any reaction to earnings,'' Alberto Rodriguez, an analyst at Mexico City brokerage Grupo Bursatil Mexicano, said in a phone interview. ``Grupo Mexico had a fairly good quarter.''
Investors also sold shares of Latin American companies on concern that the U.S. Federal Reserve will say this week that it doesn't have room to cut interest rates, Goncalves said. Higher U.S. interest rates can lure investment away from risky emerging market assets.
``An increase of rates in the U.S. increases the costs of paying external debt and the costs of financing for companies,'' Navarrete said.
In other Latin American markets, the main stock indexes in Argentina, Chile, Colombia and Peru fell while the index in Venezuela rose.
The following are the most-active stocks in Latin American markets. In Brazil, the preferred share is usually a company's most-traded class of stock.
Brazil
Cosan SA Industria & Comercio (CSAN3 BS), the world's largest combined sugar and ethanol maker, fell 1.50 reais, or 3.9 percent, to 36.70 reais. The drop in oil prices is curbing demand for ethanol as a replacement, Luiz Caetano, analyst at Banif Investment Bank in Sao Paulo, said in a phone interview.
Cia. Siderurgica Nacional SA (CSNA3 BS) gained 91 centavos, or 1.5 percent, to 63.40 reais. Brazil's third-largest steelmaker will bid for Corus Group Plc, the U.K.'s biggest steelmaker, against India's Tata Steel Ltd. at an auction starting Jan. 30. Siderurgica last offered 515 pence for Corus on Dec. 11, exceeding Tata's offer of 500 pence.
Gol Linhas Aereas Inteligentes SA (GOLL4 BS) fell 1.73 reais, or 2.8 percent, to 60.36 reais. American depositary receipts of Brazil's biggest airline by market value were cut to ``neutral'' from ``buy'' by Merrill Lynch analyst Michael Linenberg.
Tam SA (TAMM4 BS) fell 2.24 reais, or 3.2 percent, to 68 reais. ADRs of Brazil's biggest airline also were cut to ``neutral'' from ``buy'' at Merrill Lynch.
Petroleo Brasileiro SA (PETR4 BS) fell 1.23 reais, or 2.7 percent, to 45.27 reais.
Uniao de Bancos Brasileiros SA (UBBR11 BS), Brazil's third largest non-state bank, fell 57 centavos, or 2.8 percent, to 19.85 reais. Competition will increase for banks this year, Fernanda Mello, portfolio manager at Maua Investimentos, said in an interview in Sao Paulo. Banco Bradesco SA (BBDC4 BS), Brazil's largest non-state bank by assets, fell 2.46 reais, or 2.8 percent, to 86.55 reais.
Mexico
America Movil SAB (AMXL MM), Latin America's largest mobile- phone company, fell 25 centavos, or 1 percent, to 23.84 pesos. The shares gained 1.9 percent last week.
Cemex SAB (CEMEXCP MM), the world's third-largest cement maker, fell 40 centavos, or 1.1 percent, to 37.73 pesos. Rinker Group Ltd., the Australian building materials maker trying to fend off an $11.7 billion takeover by Cemex SA, said today it bought companies in Utah and Tennessee to boost its concrete production in the U.S. Monterrey-based Cemex is expected to report later today that fourth-quarter net income surged to 95 cents a U.S. share from 69 cents a year earlier, according to estimates by BB&T Capital Markets in Richmond, Virginia.
Grupo Financiero Banorte SA (GFNORTEO MM), Mexico's fifth- largest bank, fell 70 centavos, or 1.6 percent, to 42.45 pesos. Bear Stearns analyst Jason Mollin said in a research report Jan. 26 that Banorte's fourth-quarter net income was less than he expected, because of expenses. Fourth-quarter profit rose 23 percent as consumer lending increased, the bank said Jan. 25.
Embotelladoras Arca SA (ARCA* MM), Mexico's second-largest Coca-Cola bottler, rose 40 centavos, or 1 percent, to 41.15 pesos. The company said in an e-mail statement it signed a final agreement to buy a majority stake in the maker of Bokados snack foods for an undisclosed price.
The Morgan Stanley Capital International index of Latin American shares dropped 1.6 percent, to 2,959.63. The Bovespa Index of the most-traded stocks on the Sao Paulo exchange lost 838.86 points, or 1.9 percent, to 43,573.49. Petrobras, as Brazil's state- controlled oil company is known, accounted for about 179 points of the drop in the Bovespa.
``The fall of 1.6 percent in oil futures influences the price of Petrobras, which helps bring down the market,'' said Ricardo Goncalves, who helps manage 400 million reais at BI Asset Management in Sao Paulo.
Mexico's Bolsa index fell 211.66, or 0.8 percent, to 26,834.05, on concerns that lower oil prices and falling production will force cutbacks in government spending on housing and infrastructure. Mexico's government-owned oil company provides one third of the revenue to the state.
Daily oil output at the nation's largest oil field, known as Cantarell, fell by one quarter during 2006, the Wall Street Journal reported today.
``Cantarell is falling much more than expected,'' said Rodolfo Navarrete, head of equity research at Vector Casa de Bolsa in Mexico City.
Crude oil for March delivery fell $1.41, or 2.5 percent, to $54.01 a barrel on the New York Mercantile Exchange, the lowest since Jan. 22, on speculation that U.S. fuel inventories are adequate to meet increased heating demand during the next two weeks.
Shares of Grupo Mexico SA, the world's seventh-largest copper producer, fell after copper prices had their biggest one-day drop in four weeks. Grupo Mexico's Mexico-traded shares fell for the first day in seven, dropping 16 centavos, or 0.4 percent, to 44.69 pesos, after rising to a record 45 pesos on Jan. 26.
The company on Jan. 26 said net income jumped 50 percent to $447.3 million from $298.3 million a year earlier. Sales rose 37.4 percent to $1.88 billion, after copper prices rose 57 percent to an average $3.19 a pound from $2.03.
``The drop in shares is due more to the slump in copper prices than any reaction to earnings,'' Alberto Rodriguez, an analyst at Mexico City brokerage Grupo Bursatil Mexicano, said in a phone interview. ``Grupo Mexico had a fairly good quarter.''
Investors also sold shares of Latin American companies on concern that the U.S. Federal Reserve will say this week that it doesn't have room to cut interest rates, Goncalves said. Higher U.S. interest rates can lure investment away from risky emerging market assets.
``An increase of rates in the U.S. increases the costs of paying external debt and the costs of financing for companies,'' Navarrete said.
In other Latin American markets, the main stock indexes in Argentina, Chile, Colombia and Peru fell while the index in Venezuela rose.
The following are the most-active stocks in Latin American markets. In Brazil, the preferred share is usually a company's most-traded class of stock.
Brazil
Cosan SA Industria & Comercio (CSAN3 BS), the world's largest combined sugar and ethanol maker, fell 1.50 reais, or 3.9 percent, to 36.70 reais. The drop in oil prices is curbing demand for ethanol as a replacement, Luiz Caetano, analyst at Banif Investment Bank in Sao Paulo, said in a phone interview.
Cia. Siderurgica Nacional SA (CSNA3 BS) gained 91 centavos, or 1.5 percent, to 63.40 reais. Brazil's third-largest steelmaker will bid for Corus Group Plc, the U.K.'s biggest steelmaker, against India's Tata Steel Ltd. at an auction starting Jan. 30. Siderurgica last offered 515 pence for Corus on Dec. 11, exceeding Tata's offer of 500 pence.
Gol Linhas Aereas Inteligentes SA (GOLL4 BS) fell 1.73 reais, or 2.8 percent, to 60.36 reais. American depositary receipts of Brazil's biggest airline by market value were cut to ``neutral'' from ``buy'' by Merrill Lynch analyst Michael Linenberg.
Tam SA (TAMM4 BS) fell 2.24 reais, or 3.2 percent, to 68 reais. ADRs of Brazil's biggest airline also were cut to ``neutral'' from ``buy'' at Merrill Lynch.
Petroleo Brasileiro SA (PETR4 BS) fell 1.23 reais, or 2.7 percent, to 45.27 reais.
Uniao de Bancos Brasileiros SA (UBBR11 BS), Brazil's third largest non-state bank, fell 57 centavos, or 2.8 percent, to 19.85 reais. Competition will increase for banks this year, Fernanda Mello, portfolio manager at Maua Investimentos, said in an interview in Sao Paulo. Banco Bradesco SA (BBDC4 BS), Brazil's largest non-state bank by assets, fell 2.46 reais, or 2.8 percent, to 86.55 reais.
Mexico
America Movil SAB (AMXL MM), Latin America's largest mobile- phone company, fell 25 centavos, or 1 percent, to 23.84 pesos. The shares gained 1.9 percent last week.
Cemex SAB (CEMEXCP MM), the world's third-largest cement maker, fell 40 centavos, or 1.1 percent, to 37.73 pesos. Rinker Group Ltd., the Australian building materials maker trying to fend off an $11.7 billion takeover by Cemex SA, said today it bought companies in Utah and Tennessee to boost its concrete production in the U.S. Monterrey-based Cemex is expected to report later today that fourth-quarter net income surged to 95 cents a U.S. share from 69 cents a year earlier, according to estimates by BB&T Capital Markets in Richmond, Virginia.
Grupo Financiero Banorte SA (GFNORTEO MM), Mexico's fifth- largest bank, fell 70 centavos, or 1.6 percent, to 42.45 pesos. Bear Stearns analyst Jason Mollin said in a research report Jan. 26 that Banorte's fourth-quarter net income was less than he expected, because of expenses. Fourth-quarter profit rose 23 percent as consumer lending increased, the bank said Jan. 25.
Embotelladoras Arca SA (ARCA* MM), Mexico's second-largest Coca-Cola bottler, rose 40 centavos, or 1 percent, to 41.15 pesos. The company said in an e-mail statement it signed a final agreement to buy a majority stake in the maker of Bokados snack foods for an undisclosed price.
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