Brazil Stocks Open Higher On Hopes For Plan By France, Germany
22 October 2011 - 1:26AM
Dow Jones News
Brazilian stocks traded robustly higher after the open Friday,
bouncing back from steep losses in the previous session as leaders
in Germany and France promised a plan to expand the euro-zone's
bailout fund by the middle of next week.
Around 9:45 a.m. EDT, the local market's benchmark Ibovespa
index of most-traded issues was up 1.4% at 54,771 points.
Expectations for a positive start in U.S. markets gave investors
in Sao Paulo reason to bid local shares higher after the opening
bell. European markets rose sharply on hopes that French President
Nicolas Sarkozy and German Chancellor Angela Merkel will make good
by next Wednesday on a pledge to reach an agreement to strengthen
the Europe's key rescue fund.
Higher third-quarter net profits reported by U.S. firms such as
General Electric, Verizon, Honeywell and McDonald's helped underpin
the gains.
Local currency and stock markets have been sucked into the ebb
and flow of global risk appetite in recent months since the
European debt crisis escalated, with the Brazilian real and company
stocks displaying a high degree of day-by-day volatility. The real
recently traded stronger at BRL1.7758 to the dollar.
State-controlled energy giant Petroleo Brasileiro SA (PBR,
PETR4.BR) shares were up 0.9% at BRL18.99. Petrobras' chief
financial officer said late Thursday that the appreciation of the
dollar against the Brazilian real since August will have a slight
negative impact on the firm's balance sheet. The official declined
to give numbers, citing the Nov. 11 release of its quarterly
earnings report, but said some 70% of the Petrobras' debt is
denominated in dollars.
Shares of Brazil's largest sugar and ethanol group, Cosan SA
Industria e Comercio (CZZ, CSAN3.BR) were up 0.1% at BRL26.53,
after the company said Friday it bought the distribution assets of
Exxon Mobil Corp. (XOM) in Bolivia, Paraguay and Uruguay. Cosan
didn't unveil the acquisition's value but said that with the deal,
annual sales should increase by 5%.
State-controlled utility Centrais Eletricas Brasileiras, or
Eletrobras, (ELET6.BR) shares up 1.4% at BRL23.04. Electrobras said
Thursday it plans to go ahead with an offer for a stake in
Portugal's electrical utility. Earlier this week Electrobras said
it plans to sell up to $2.5 billion in global bonds.
Shares of Vale SA (VALE, VALE5.BR), the world's biggest iron-ore
producer, were up 1.6% at BRL37.82, and telecommunications company
Tele Norte Leste Participacoes SA (TNE, TNLP4.BR), or Oi, was up
1.6% at BRL18.15.
-By Paul Kiernan, Dow Jones Newswires; (+55)11-3544-7074;
paul.kiernan@dowjones.com
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