SANTIAGO, Chile, March 21 (UPI) -- Latin American equities were mixed though optimistic this week as Mexico, hosting a major U.N. financial conference, saw its major stock index shoot to its highest levels in 20 months, mostly on optimism that the U.S. economy is on the rise.
As almost 50 world leaders gather this week in Monterrey, Mexico, for the U.N. International Conference on Financing for Development, Mexican President Vicente Fox will be looking to forge even stronger economic ties with President Bush and other leaders from developed economies.
Since gaining the presidency in 2000, Fox, a former executive for Coca-Cola, has relentlessly touted his nation as a model to follow for other developing economies, and whether other Latin American leaders agree or are even in the same situation to mimic Fox's tactics, there is little doubt that Mexico will be the biggest winner in the region if the U.S. economic behemoth awakens.
In Tuesday's Washington Post, Fox opined in part that "the (U.N.) conference will seek to strengthen the policies and institutions required to mobilize domestic resources and attract foreign investment, emphasizing the primary responsibility of developing countries to implement sound economic policies."
Fox could have addressed the issue directly to Argentine President Eduardo Duhalde. While Mexico has not been as affected as other Latin American countries in regard to the fallout from Argentina's economic crisis, the lack of those "sound economic policies" of which Fox writes have been known to stamp the entire region as risky, sending foreign investors to other regions and other emerging opportunities.
As for Mexican markets, the mood is bullish as the IPC index was up for the week with investors continuing to see the economic tide turning in the United States, where about 85 percent of Mexico's exports are sent. Last Thursday, the IPC ended last Thursday 0.4 percent lower at 7,188.77 as it followed the down day on the Nasdaq.
Mexico's tech and telecommunications sector is heavily influenced by the U.S. exchange. On Friday, the index finished 1.17 percent up at 7,273.08 as telecoms rose.
Telefonos de Mexico jumped 1.5 percent On Monday, the index finished up to 7,344.57, its highest level in more than 20 months. Broadcasters fared well on the day, with TV Azteca rising 3.6 percent and Televisa finishing 3.56 up.
On Tuesday, the index climbed even higher, gaining 1.14 percent to 7,427.92. Telmex jumped 1.86 percent while cement producer Cemex rose 2.77 percent. The IPC ended 0.6 percent lower at 7,384.13 Wednesday as the market followed a bad day on Wall Street. Telmex ended slightly down and Cemex finished off more than 2.8 percent.
In Brazil, the Bovespa index was mixed as investors kept their eyes on a turbulent political scenario ahead of presidential elections in October, and waited for signals that an interest-rate cut was coming.
Last Thursday, the Bovespa finished off 0.9 percent at 14,117 as heavyweight phone company Telemar slid more than 3 percent when Standard & Poor's put the company's corporate credit outlook at negative.
Friday brought a jump to 14,365 for the index as Telemar recovered 3.6 percent and state-run oil giant Petrobras gained on higher oil prices. Monday saw the Bovespa drop to 14,244 as investors held their breath awaiting news on the extension of a financial transactions tax, the CPMF, and whether the central bank would cut a key interest rate Wednesday.
On Tuesday the index dropped 0.89 percent to 14,117.8 as the rate cut and political squabbling over the CPMF intensified. Telemar lost almost 2 percent.
Wednesday saw a mixed market as investors awaited after-the-bell word about the rate cut. The Bovespa ended slightly down at 14,089.7, with top cable TV company Globo Cabo down 1.9 percent.
In Argentina, the MerVal was mostly up for the week as it continued its trend of moving in the opposite direction to the country's peso, which fell to new lows.
Last Thursday, the MerVal ended down 3.42 percent at 389.25 as energy company and market heavyweight Perez Companc said it was going to re-negotiate its more than $2.6 billion in debt. The company dropped 4.4 percent.
On Friday, the index ended slightly up at 390.67, despite Perez falling again. The MerVal rose 1.4 percent Monday as steel company Siderca gained 3.4 percent on a day that saw the central bank banning 27 companies from participating in the foreign exchange market, which has a significant influence on the equities market, until they adhere to regulations that are meant to help the ailing peso.
On Tuesday, the index finished nearly 3 percent higher as Grupo Financiero Galicia rose 2.5 percent, and Perez gained more than 4 percent.
Wednesday saw a gain of 1.09 percent to 412.9 as the weak peso (which closed Wednesday at Ps. 2.58 = $1) helped the MerVal again. Siderca gained 5.73 percent.
In Chile, the IPSA ended last Thursday down 0.37 percent at 99.85 in light trade. Energy company Enersis slipped. 2.2 percent while telecom Telefonica CTC Chile rose 1.24 percent.
Friday brought a rise to 100.39 for the index, as SQM, a fertilizer company, rose 2.73 percent.
Monday saw the IPSA gain slightly to 100.5, while Tuesday brought a drop to 99.83. On Wednesday, the index slid to 99.63
In Venezuela, the IBC index finished last Thursday at 6,940.61, then moved down to 6,920.72 on Friday. Monday brought another drop to 6,861.16. On Tuesday, the market was closed for a holiday, while on Wednesday, the IBC ended at 6,812.84.
