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EMERGING MARKETS-Latam stocks rise despite euro zone troubles
November 14, 2012 / 12:42 AM / 5 years ago

EMERGING MARKETS-Latam stocks rise despite euro zone troubles

* Brazilian homebuilder Gafisa buoys Bovespa
    * Government moves rattle Brazil's electric sector
    * Brazil's Bovespa up 0.74 pct, Mexico's IPC rises 0.54 pct

    By Danielle Assalve and Lorena Segura
    SAO PAULO/MEXICO CITY Nov 13 (Reuters) - Latin American
stocks rose from an intra-day two-month low on Tuesday to end
the day up as Brazilian homebuilder Gafisa lifted trading in the
region's largest economy.
    Brazil's Bovespa gained 0.74 percent to 57,486.07,
while Mexico's IPC rose 0.54 percent to 41,078.50, its
second day of gains after a five-day losing streak.
    The MSCI Latin American stock index traded
flat at 3,584.38. The index has lost 1.6 percent since the
beginning of November.
    Early trading suffered from news that officials from the
euro zone and the International Monetary Fund publicly disagreed
over the way Greece would reduce its heavy debt burden.
    But some of that pressure was relieved after a German
newspaper said Berlin was working on a single aid package of
more than 44 billion euros ($55.9 billion) to cover Greek debt
repayments this year.  
    "I think the market is speculating," said Javier Benavides,
a trader at the Base brokerage in Mexico City.
    "The news from Greece is still bad, the fiscal cliff, too,
but we already knew about these risks so there's no new bad
news, just speculation about old bad news."
    Homebuilder Gafisa, whose profit was nearly wiped out in the
third quarter because of canceled sales in its low-income Tenda
division, announced it would hold new low-income projects until
they are entirely clear of clients' credit risk, removing a
significant drag on this year's revenue. 
    The market looked favorably on the announcement, with shares
ending the day up 6.32 percent. Fellow homebuilder MRV
Engenharia also rose, adding 5.32 percent, despite a
Reuters analyst survey on Monday, which pointed to tough times
for Brazil's construction sector. 
    Electric utilities posted some of the biggest swings on the
index as the government's expanding role in the sector continued
to rattle a conservative industry.
    Shares of power company Cteep reached their
biggest daily high in four years, rising 9.93 percent after the
company said on Monday that its board recommended against
renewing an expiring concession to transmit power, rejecting a
government plan to lower electricity costs to spur economic
    State-led power company Eletrobras jumped 1.54
percent. Nonetheless, investors are concerned the company will
be forced to accept concession renewals at sharply lower
tariffs, already below those charged by private-sector
    "I see very difficult days ahead for the company if it
renews the concessions," said Alexandre Montes, an analyst with
Lopes Filho e Associados in Rio de Janeiro. "The problem is that
Eletrobras' controlling shareholder is the government. It can go
to Eletrobras and say 'You are going to renew those concessions
because I said so.'"
    Mexico's IPC index added 0.54 percent led by shares
of bottler Femsa, which rose 1.63 percent. The
company announced last week that it would diversify its
operations by buying a 75 percent stake in drug store chain YZA.
    Chile's IPSA index slid for the fifth straight
session, losing 0.41 percent to trade at a six-week low of
    Latin America's key stock indexes at 2328 GMT:
 Stock indexes        Latest                 % change
 MSCI LatAm                 3,584.38             0.09
 Brazil Bovespa            57,486.07             0.74
 Mexico IPC                41,078.50             0.54
 Chile IPSA                 4,207.11            -0.41
 Chile IGPA                20,630.11             -0.3
 Argentina MerVal           2,354.05            -1.68
 Colombia IGBC             14,164.77            -0.98
 Peru IGRA                 21,067.94             0.04
 Venezuela IBC            371,917.66             1.06

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