Bloomberg News

Latin Day Ahead: Vale Raised to ‘Buy’ by Nomura on China Demand

January 23, 2009

Cia. Vale do Rio Doce was raised to “buy” from “neutral” by Nomura International Plc on prospects Chinese demand will revive; Corn, soybeans fall as the recession may cut demand for U.S. crops; Crude oil falls as U.S. stockpiles gain on a deepening recession; Petrobras and Galp Energia find oil in Brazil’s Sergipe Basin.

TOP STORIES; MOST READ ON BLOOMBERG

Vale, Kazakhmys Raised to ‘Buy’ by Nomura on Chinese Demand

Cia. Vale do Rio Doce, the world’s largest iron-ore producer, was raised to “buy” from “neutral” by Nomura International Plc on prospects Chinese demand will revive by the end of the first quarter.

Corn, Soybeans Fall as Recession May Cut Demand for U.S. Crops

Corn and soybeans both dropped for a second day on speculation the worsening global recession will curb demand for the crops from the U.S., the world’s biggest exporter of the grains.

Crude Oil Falls as U.S. Stockpiles Gain on Deepening Recession

Crude oil fell after U.S. stockpiles rose more than four times forecast last week, raising concern of an oversupply as the global recession deepened.

Petrobras, Galp Energia Find Oil, Gas in Onshore Sergipe Block

Galp Energia SGPS SA and Petroleo Brasileiro SA found traces of oil and gas in an onshore well in Brazil’s Sergipe Basin.

MAIN COMPANIES:

Brazil

Cia. Vale do Rio Doce (VALE5 BS): The world’s largest iron- ore producer may acquire 12.5 percent stakes in two natural-gas exploration blocks off the coast of Brazil. Vale declined 0.5 percent to 25.85 pesos.

Estacio Participacoes SA (ESTC3) (ESTC3 BS): Fator Corretora reiterated its “outperform” rating on Brazil’s largest private university administrator, writing that there is only a “remote” risk of Estacio having to pay 458.9 million reais for alleged lack of payment on some social-security taxes. Estacio fell 6.7 percent to 12.60 reais.

Votorantim Celulose & Papel SA (VCPA4 BS) and Aracruz Celulose SA (ARCZ6 BS): VCP, Brazil’s third-biggest paper pulp processor, is acquiring Aracruz and may have its BBB debt rating downgraded by Standard & Poor’s. Aracruz had its outlook revised to positive on a BB rating by S&P. VCP rose 0.5 percent to 13.90 reais. Aracruz rose 2 percent to 2.09 reais.

Mexico

Controladora Comercial Mexicana SAB (COMERUBC) : The Mexican supermarket chain that faces more than $1 billion in currency derivative liabilities is a “high-risk” investment even if it reaches a so-called “standstill” agreement with creditors, Citigroup Inc. said in a research note yesterday. Comercial Mexicana fell 1 percent to 3.10 pesos.

Kimberly-Clark de Mexico SAB (KIMBERA MM): Mexico’s biggest maker of paper products said fourth-quarter net income fell 36 percent to 651 million pesos ($46.4 million) from a year earlier on losses from foreign exchange as the peso dropped. Kimberly- Clark rose 0.7 percent to 41.67 pesos.

Vitro SAB (VITROA) : Mexico’s largest glassmaker had its credit rating lowered four levels, to CC, with a negative outlook, by S&P, on concern the company may miss a February interest payment of $45 million. Vitro rose 1.2 percent to 6.14 pesos.

LATIN AMERICAN MARKETS:

Argentina: The economy expanded 2.9 percent in November from the year-ago period, according to the median estimate in a Bloomberg survey of seven economists. The National Statistics Institute is scheduled to report the data 1 p.m. New York time.

The peso fell 0.1 percent to 3.4750 per dollar.

The yield on the country’s inflation-linked peso bonds due in December 2033 rose three basis points, or 0.03 percentage point, to 17.39 percent, according to Citigroup Inc.’s local unit.

Mexico: The trade deficit reached $2.6 billion in December, from $2.8 billion during November, according to the median estimate in a Bloomberg survey of 15 economists. The statistics agency is scheduled to report the data at 3:30 p.m. New York time.

The peso fell 2.2 percent to 14.0589 per dollar.

The yield on the 10 percent bond due December 2024 fell nine basis points to 7.57 percent, according to Banco Santander SA.

Other prices in Latin American markets:

Brazil: The real rose 0.7 percent to 2.3205 per dollar.

The yield on the zero-coupon, real-denominated bond due in January 2010 fell nine basis points to 11.27 percent, according to Banco Votorantim.

Chile: The peso rose 0.3 percent to 620.55 per dollar.

The yield for a basket of five-year peso bonds in inflation-linked currency units, called unidades de fomento, rose two basis points to 3.17 percent, according to Bloomberg composite prices.

Colombia: The peso weakened 0.4 percent to 2,258.5 per dollar.

The yield on the benchmark 11 percent bonds due July 2020 fell 13 basis points to 9.85 percent, according to Colombia’s stock exchange.

Peru: The sol fell 0.1 percent to 3.1565 per dollar.

ECONOMIES: Brazil will publish weekly consumer prices and December tax collections; Venezuela will publish its crude oil basket; Argentina will publish its November economic-activity index and Mexico will announce its December trade balance.


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