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Category: Daily Brief
Posted inDaily Brief
Brazil: Retail Sales Rise
Brazilian retail sales rose 5.3 percent in June, the fastest pace in three months, suggesting consumer spending on home appliances, cars and furniture is holding up after nine central bank interest-rate increases. The central bank has raised the benchmark overnight rate to a 21-month high of 19.75 percent from 16 percent in September. Economists expect the central bank to begin cutting the rate as inflation slows.
Posted inDaily Brief
Chile´s Constitution Amended
Chile’s congress annulled constitutional provisions put in place by former dictator Augusto Pinochet that reserved seats in the senate for military officers and blocked the president from firing armed forces commanders. The number of Chilean senators will drop by 10 to 38 and the presidential term will be shortened from six to four years. Presidential elections are set for December, with Michelle Bachelet of the Socialist Party leading in the polls.
Posted inDaily Brief
Chilean Peso Rises
Chile’s currency rose for a ninth straight session to 533.50 to the dollar as the price of copper, the country’s biggest export, hit record levels. The peso was also supported by last week’s decision by the central bank to raise its benchmark rate 25 basis points to 3.75 percent after inflation in July rose to a two-year high. Chile’s $94 billion economy, Latin America’s fifth-largest, grew 6.1 percent in 2004, the fastest since 1997, and Finance Minister Nicolas Eyzaguirre forecasts a 6 percent expansion this year.
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Kuczynski Named Prime Minister
Peru’s Finance Minister Pedro-Pablo Kuczynski, a former managing director at Credit Suisse First Boston and an ex-World Bank official, was named the nation’s new prime minister to head a cabinet that took office Tuesday. Kuczynski’s deputy, Fernando Zavala, was appointed finance minister. Kuczynski returned to the finance minister’s post in 2004 and has overseen the longest unbroken stretch of economic growth in Peru’s history. President Alejandro Toledo´s mandate ends next July.
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Mexico: Growth Quickens
Mexican economic growth quickened to 3.1 percent year-on-year in the second quarter, led by a jump in investment as companies build plants to meet rising demand in the domestic market and in the US. The Mexican economy grew 2.4 percent in the first quarter. Mexico´s central bank has left its benchmark interest rate unchanged since March as inflation has moved closer to the bank´s target of 2 to 4 percent.
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Wilson Ferreira, Jr., CEO, CPFL Energia
to join discussions at Brazil – The Way Forward, The 3rd Brazil Investment Forum in Rio de Janeiro, 31 Aug – 1 Sep 2005. Apply for your invitation today at www.latinfinance.com/brazil
Posted inDaily Brief
Alckmin Plans Tax Cut
Sao Paulo governor Geraldo Alckmin said he plans to cut tax rates and spending by mid-September in a bid to spur investment and employment. Alckmin, a member of the opposition Social Democracy Party, said he hopes the measures will help compensate for delays in the passage of federal legislation designed to reduce the number of state tax rates.
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Banco do Brasil´s Net Rises
Banco do Brasil, Latin America’s biggest bank, said second-quarter profit jumped 25 percent year-on-year to $427 million. Brazilian banks including Banco do Brasil, which is about 70 percent owned by the government, are reporting a surge in profits as a growing economy fuels demand for credit while interest rates, at their highest since October 2003, boost returns on loans. Brazil’s central bank raised its benchmark rate by 3.75 percentage points over the nine months through May in a bid to stem inflation. Banco do Brasil´s assets under management were $95 billion at the end of the quarter, up 3 percent year-on-year.
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Cemex Rating Raised
Moody´s raised Cemex´s debt rating one level to Baa3, its lowest investment-grade rating, and said the company´s debt outlook is stable. Cemex paid $5.8 billion in March to acquire Britain’s RMC Group, making it the largest cement and concrete producer in the US and expanding its operations in Europe, Asia and Latin America. The company will probably reduce debt by $2 billion this year and doesn’t face any “significant” refinancing of debt until 2009, Moody’s said.