Bloomberg News

Latin Day Ahead: Mexico Needs to Boost Tax Income, S&P Says

August 31, 2009

Mexican President Felipe Calderon must create new sources of revenue to offset declining oil income if the country is to avoid a downgrade of its debt rating, Standard & Poor’s said; Argentina may produce a record 50 million tons of soybeans in the next harvest; China needs to limit supplies of iron ore sold on the cash market as talks to settle contract prices stalled. Banco Central do Brasil President Henrique Meirelles’ political ambitions are raising concern among some investors.

TOP STORIES; MOST READ ON BLOOMBERG

Mexico Needs to Find New Revenue Sources, S&P Says: Week Ahead

Mexican President Felipe Calderon must create new sources of revenue to offset declining oil income if the country is to avoid a downgrade of its debt rating, Standard & Poor’s analyst Lisa Schineller said.

Argentina Set for Record Soybean Crop as El Nino Breaks Drought

Argentina may produce a record 50 million tons of soybeans in the next harvest as rains forecast for the next three months break the worst drought in a century.

China Needs to Limit Iron Ore Supplies Sold on Spot

China, the world’s largest iron ore consumer, needs to limit supplies of the material sold on the cash market as talks to settle contract prices stalled, Baoshan Iron & Steel Co. said.

Meirelles ‘Anchor’ of Brazil Growth Ponders Politics: Week Ahead

Banco Central do Brasil President Henrique Meirelles’ political ambitions are raising concern among some investors as he seeks to pull Latin America’s biggest economy out of recession ahead of next year’s election.

MAIN COMPANIES:

Brazil

LLX Logistica SA (LLXL3) (LLXL3 BS): The Brazilian port operator said the investment arm of Brazil’s state development bank, known as BNDESPar, reduced its stake in LLX by 41.7 million common shares to 6 percent. LLX rose 2.8 percent to 5.20 reais.

Lojas Renner SA (LREN3 BS): Brazil’s biggest publicly traded clothing retailer said funds managed by Aberdeen Asset Management Plc own 17.9 million of its common shares, or 14.7 percent. Lojas Renner fell 0.4 percent to 29.83 reais.

Vale SA (VALE5) (VALE5 BS): The world’s biggest iron-ore producer plans to build a 5 million ton-per-year steel plant in Brazil’s Espirito Santo state. The company announced the plans in an e- mailed statement Aug. 28. Vale rose 0.8 percent to 33.60 reais.

Chile

Cencosud SA (CENCOSUD) : Argentina’s supermarket sales by volume rose 13.6 percent in July from a year earlier, the National Statistics Institute said. Cencosud, which operates Jumbo supermarkets in Argentina, fell 0.8 percent to 1,455 pesos.

LATIN AMERICAN MARKETS:

Brazil: Industrial output rose 1.5 percent in July after increasing 0.2 percent the previous month, according to the median estimate of 11 economists in a Bloomberg survey. The national statistics agency is slated to publish its report at 8 a.m. New York time.

The real weakened 0.7 percent to 1.8790 per dollar.

The yield on the zero-coupon, real-denominated bond due in January 2010 was little changed at 8.69 percent, according to Bloomberg prices.

Chile: Industrial output dropped 8 percent in July after declining 8.3 percent in June, according to the median estimate of nine analysts surveyed by Bloomberg.

Chile’s unemployment rate rose to 10.9 percent in July from 10.7 percent the previous month, according to the median forecast of nine economists in a Bloomberg survey. The national statistics agency is expected to release both reports at 9 a.m. New York time.

The peso advanced 0.1 percent to 550.65 per dollar.

The yield for a basket of Chile’s 10-year peso bonds in inflation-linked currency units, called unidades de fomento, fell three basis points, or 0.03 percentage point, to 2.91 percent, according to Bloomberg composite prices.

Colombia: The national statistics agency is slated to release its July jobless report after noon New York time. Colombia’s urban jobless rate was 13 percent in June, compared with 12.4 percent a month earlier.

The peso declined 0.3 percent to 2,038.72 per dollar.

The yield on Colombia’s benchmark 11 percent bonds due July 2020 fell two basis points to 9.42 percent, according to Colombia’s stock exchange.

Other prices in Latin American markets:

Argentina: The peso fell 0.1 percent to 3.8508 per dollar.

The yield on the country’s inflation-linked peso bonds due in December 2033 fell three basis points to 14.17 percent, according to Citigroup Inc.’s local unit.

Mexico: The peso slid 0.1 percent to 13.2385 per dollar.

The yield on Mexico’s 10 percent bond due December 2024 fell one basis point to 8.41 percent, according to Banco Santander SA.

Peru: The sol rose 0.2 percent to 2.9345 per dollar.

The yield on Peru’s 8.6 percent bond maturing August 2017 was little changed at 5.15 percent, according to Citigroup Inc.’s unit in Lima.

ECONOMIES: Brazil will announce its July industrial production; Chile will publish its July industrial sales, unemployment rate and copper production; Argentina will release its July construction activity; Colombia will announce its July unemployment rate.

To contact the reporter on this story: Helder Marinho in Rio de Janeiro hmarinho@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos in New York at papadopoulos@bloomberg.net


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