EMERGING MARKETS-Utilities weigh on Brazil shares, Mexico rallies

Thu Nov 22, 2012 12:56pm EST

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* Brazil utilities weigh on Brazil's Bovespa
    * Bovespa rises 0.25 pct, Mexico IPC up 0.86 pct
    * Mexico shares rise for fourth straight session


    By Asher Levine
    SAO PAULO, Nov 22 (Reuters) - Latin American stocks rose on
Thursday following encouraging economic data from key trade
partner China, though Brazilian utilities weighed and light
volume kept markets volatile.
    The MSCI Latin American stock index rose for
the first session in three, adding 0.27 percent to 3556.61.
    Mexico's benchmark IPC rallied 0.86 percent, in its
fourth straight day of gains. In Brazil, the Bovespa 
index rose 0.25 percent; trading fell to nearly half of normal
volume due to the U.S. Thanksgiving holiday, traders said.
    Data on Thursday showed that manufacturing growth in China
accelerated in November for the first time in 13 months, leading
to investor optimism that the world's second-largest economy is
gaining steam. 
    China is Brazil's biggest trading partner and a key
purchaser of Latin American commodities exports such as iron
ore, soy, copper and petroleum. 
    "The China data showed the economy is expanding and that
boosted the market early," said Hamilton Alves, a senior analyst
with BB Investimentos in Sao Paulo, Brazil. 
    Alves warned that the gains were unlikely to last through
the session, given the lack of liquidity due to the U.S. holiday
and the recent tendency among local investors to take profits as
soon as they appear.
    Homebuilders such as PDG Realty, MRV Engenharia
 and Cyrela drove Brazil's benchmark
Bovespa index to a 0.25 percent gain.
    State-controlled oil company Petrobras gave up
early gains, losing nearly 1 percent.
    "Today is a dead day. The market is without volume and any
operation is pushing the stocks around," said Pedro Galdi, a
strategist at SLW Corretora in Sao Paulo. 
    Brazilian electrical power companies, which operate under
government concessions, weighed on the index, with shares of
electric utility Eletrobras continuing their slide
following their biggest one-day plunge ever on Wednesday.
    Common shares in the government-controlled firm have lost 47
percent of their value this quarter on expectation that a hydro
dam concession renewal plan and related power-rate cuts will
slash revenue, profit and investment. 
    The shares pared some of their losses later in the session,
however, after the head of Brazil's federal Energy Research
Company said the government would not let Eletrobras "perish."
    "The electric sector was always seen by investors as fixed
income because of the dividends," Alves said. "Any change in
regulation is going to bring about uncertainty and when in
doubt, investors run. We are seeing a herd effect."
    Uncertainty over possible government intervention extended
to other companies that rely on concession contracts, with
shares of sanitation firm Sabesp and highway operator
CCR both down nearly 1 percent.
    Shares of Cetip, Brazil's largest securities
clearinghouse, fell over 4 percent after the company said on
Wednesday that Chief Executive Officer Luiz Fernando Vendramini
Fleury will leave the company once his contract expires in July
2013. 
    "The CEO change is leaving investors cautious because we
don't know what's going to happen in the company from that point
on," said Felipe Rocha, an analyst with Omar Camargo Corretora
in Curitiba, Brazil. 
    In Mexico, shares of heavyweight telecommunications firm
America Movil rose 1.5 percent, while retail giant
Wal-Mart de Mexico rose 1.6 percent.
    A technical momentum indicator known as the MACD posted a
"bullish cross," suggesting the index could extend its rally
further in coming sessions. The benchmark IPC index is up nearly
3 percent so far this week.
    Chile's IPSA index gave up early gains to slide 0.18
percent, its third straight day of declines.
    Industrial conglomerate Copec fell 0.78 percent,
while retailer Cencosud dropped 0.7 percent. 
    
    Latin America's key stock indexes at 1554 GMT:
 Stock indexes                           daily %      YTD %
                          Latest          change     change
 MSCI LatAm                  3,556.73       0.27       4.62
                                                  
 Brazil Bovespa             56,380.78       0.25      -0.66
                                                  
 Mexico IPC                 42,026.99       0.86      13.35
                                                  
 Chile IPSA                  4,139.63      -0.14      -0.91
                                                  
 Chile IGPA                 20,389.53       -0.1       1.29
                                                  
 Argentina MerVal            2,255.53      -2.76      -8.41
                                                  
 Colombia IGBC              14,142.13      -1.43      11.66
                                                  
 Peru IGRA                  20,100.20      -0.01       3.22
                                                  
 Venezuela IBC             386,150.97       0.59     229.94
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