Here it is..
o: Glenn Norman (723 )
From: Glenn Norman (
Ignore )
Friday, Feb 4 2000
10:04AM ET
Reply # of 724
Banking shares spark Latin American bourses
Banamex surges after Moody's gives nod to Mexico
debt
By Tim Wilkins, LatinStocks.com
Last Update: 7:05 PM ET Feb 3, 2000 StockWatch
Telecom Report
NEW YORK (LatinStocks.com) -- Grupo Financiero
Banamex-Accival SA led a rally of Mexican banks on
optimism an upgrade of the country's sovereign debt
may lead to a surge in capital inflows and demand for
banking services.
Banamex, Mexico's largest bank gained 8 percent to 41.8
pesos, leading the bolsa index up 4.3 percent to 7,058.21.
No. 2 bank Grupo Finananciero Bancomer SA (GFNSY:
news, msgs) gained 6.1 percent to 3.8, and
Monterrey-based Grupo Financiero Banorte SA gained 6
percent to 12.3.
Moody's Investors Service has put Mexico's on review
for a potential upgrade to investment grade, which could
lead to a boom of purchases of the country's debt by
mutual and pension funds that are currently restricted
from buying the securities. That will make it cheaper for
companies to borrow and enhance banks' ability to lend.
"An investment grade for Mexico will help everybody,
but especially the private sector," said Chip Brown, Latin
American economist for Morgan Stanley Dean Witter.
"It's going to raise corporate profits by cutting
borrowing costs."
Brown has lowered his forecast for Mexico's interest
rates in the wake of Moody's decision, and said the
rating agency's action suggests an upgrade may come as
soon as this year, well before the forecast of most
analysts.
Mexico also said today it has revamped its rules for
electronic stock trading, which could boost transaction
volumes on the Internet stock services launched last
week by Banamex and Bancomer.
In Brazil, banks also led gains on optimism the U.S.
Federal Reserve's decision to boost its benchmark
interest rate a quarter point to 5.75 percent will have a
negligible effect on the country's outlook for growth and
investment this year.
Banco Bradesco SA (BBQCY: news, msgs), the largest
private bank, gained 4.2 percent to 14.9 reals, leading the
Bovespa index up 3.5 percent to close at 17,457.12.
while Banco do Estado de Sao Paulo SA rose 5.6 percent
to 57.98.
Banespa is Brazil's best-performing stock this year, up 12
percent in dollar terms. The sale of the state-owned bank
in May is expected to reap more than $3 billion for the
government, as international banks including Banco
Santander Central Hispano SA (STD: news, msgs), ABN
Amro Bank NV (ABN: news, msgs) and Citigroup (C:
news, msgs) jockey to carve a niche in Brazil's banking
market, the largest in Latin America.
CA Nacional Telefonos de Venezuela (VNT: news,
msgs) gained 3.3 percent to 25 1/2. The Venezuelan
phone company posted a 0.5 percent increase in dollar
revenue last year, even as the country weathered its
worst recession in a decade and a rate freeze in the
second half.
Electricidad de Caracas, the largest power company, rose
1.2 percent to 206 bolivars, even Venezuela's decision
that all electric utilities must negotiate new rates increase
cast doubt on the company's plans to raise its tariffs by
10 percent.
"Any undue increases in electricity rates will be
eliminated," said Energy and Mines Minister Ali
Rodriguez.
StarMedia Networks Inc. (STRM: news, msgs) rose 18.2
percent to 41 3/8 after the Latin American Internet
company launched an instant messaging service that is
compatible with ICQ, the online chat protocol owned by
America Online (AOL: news, msgs) that is used by more
than 35 million people worldwide. StarMedia also said it
has purchased companies that produce guides to the
Brazilian cities of Rio de Janeiro and Sao Paulo, and
Medellin in Colombia. On Monday, Merrill Lynch
upgraded shares to "buy", citing a bullish view on the
region's Internet industry. See full story.
Transportadora de Gas del Sur SA (TGS: news, msgs)
gained 6.9 percent to 8 3/4 after the Argentine gas
pipeline operator said it has signed a $20 million deal
with Pan American Energy and British Gas to build a gas
pipeline to neighboring Uruguay. TGS is
majority-owned by U.S. energy firm Enron [s ene] and
Perez Companc SA (CNPZY: news, msgs).
Cifra SA (CFRCY: news, msgs), Mexico's largest
retailer, gained 7.6 percent to 17.32 pesos on optimism
the company's earnings surged in the fourth quarter as
operating costs fell and Christmas promotions swelled
sales. Cifra, which is majority owned by Wal-Mart
Stores Inc. (WMT: news, msgs), operates more than 200
supermarkets, 200 restaurants and more than 50
department stores.
Globo Cabo SA (GLCBY: news, msgs), a Brazilian cable
television operator, gained 4.4 percent to 23 7/8 after
options of its U.S.-listed shares were listed in Chicago.
The Sao Paulo Stock Exchange also plans to add Globo
Cabo to its benchmark Bovespa index of Brazil's
most-traded shares.
Telesp Celular Participacoes SA (TCP: news, msgs) rose
7.3 percent to 42 1/8 after the wireless phone company, a
unit of Portugal Telecom SA, posted earnings that were
one-half higher than analysts expected in the fourth
quarter.
Vina Concha y Toro SA (VCO: news, msgs) gained 2.3
percent to 445 pesos after the Chilean winemaker's
association said it expects export growth to more than
quadruple this year, gaining 10 percent to around $580
million. Vina San Pedro SA gained 1.1 percent to 4.75.
El Sitio Inc. (LCTO: news, msgs) rose 0.9 percent to 21
1/4 after the company was reiterated with a "strong buy"
by Credit Suisse First Boston analyst William Landers.
Landers cited the company's strategic alliance with
Impsat Fiber Inc. (IMPT: news, msgs) and focus on
premium Internet services in Brazil as reasons he expects
the company's shares to more than double to $55 this
year.
"We believe the El Sitio's shares offer tremendous value
at current levels," Landers said.
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