Latin Day Ahead: Brazil Bank May Cut Interest Rate to 11.25%

Brazil’s central bank will probably cut its benchmark interest rate by the most in five years after a record contraction of Latin America’s biggest economy; Brazil may announce plans within three weeks to expand government-backed mortgage lending for low-income homebuyers, Gafisa SA’s chief executive officer said; Devon Energy Corp., Petroleo Brasileiro SA (PETR4) and SK Energy Co. found evidence of gas in an offshore block in Brazil; Golden Oil Corp. agreed with Colombia’s government to explore three fields in the South American country.

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Meirelles May Cut Brazil Interest Rate to 11.25% After GDP Drop

Brazil’s central bank will probably cut its benchmark interest rate by the most in five years after a record contraction of Latin America’s biggest economy.

Brazil May Unveil Housing Stimulus Plan in 3 Weeks, Gafisa Says

Brazil may announce plans within three weeks to expand government-backed mortgage lending for low-income home buyers, said Wilson Amaral, chief executive officer of Gafisa SA (GFSA3), the nation’s second-largest real estate developer.

Devon Energy, Petrobras Find Gas in Offshore Barreirinhas Well

Devon Energy Corp., Petroleo Brasileiro SA, and SK Energy Co. found evidence of gas in an offshore block in Brazil’s Barreirinhas Basin, the country’s petroleum regulator said.

Golden Oil Corp. to Explore Three Colombia Fields; Shares Rise

Golden Oil Corp., a South Korean oil developer, agreed with the Colombian government to explore three fields in the South American country. The shares rose the most in more than a year in Seoul trading.

MAIN COMPANIES:

Argentina

Molinos Rio de la Plata SA (MOLI AF): Argentine farmers will stage a nationwide protest on March 19 after an impasse in talks with the government over export taxes. The government and farm groups plan to meet again March 17. Molinos, the Buenos Aires- based food producer, closed unchanged at 9.9 pesos.

Pampa Energia SA (PAMP) : Argentina’s biggest electricity holding company reported a profit of 115 million pesos ($31.6 million) for 2008. Pampa rose 3 percent to 1.02 pesos.

Brazil

Banco do Brasil SA (BBAS3 BS): Brazil’s central bank approved the takeover of Banco Nossa Caixa SA by federally controlled Banco do Brasil. Banco do Brasil rose 4.3 percent to 14.03 reais.

Gafisa SA (GFSA3 BS) and Rossi Residencial SA (RSID3) (RSID3 BS): Brazil’s government will likely release details of its low-income housing plan in three weeks. Gafisa, which got 45 percent of sales from the low-income segment last year, rose 1.8 percent to 9.39 reais. Rossi, which aims to get 50 percent of 2009 revenue from low-income housing, rose 2.7 percent to 3.42 reais.

Chile

Banco Santander Chile (BSAN) and Banco de Chile (CHILE) (CHILE CC): Chilean banks are trading at “relatively attractive” levels after underperforming Latin American peers in the last month and offer higher dividend yields, IM Trust wrote in a note. Santander rose 4.1 percent to 19.15 pesos. Banco de Chile gained 0.7 percent to 35.25 pesos.

Mexico

Cemex SAB (CEMEXCPO) : The largest cement maker in the Americas had debt ratings cut five levels by Standard & Poor’s and three levels by Fitch Ratings. Cemex rose 14 percent to 7.12 pesos.

Controladora Comercial Mexicana SAB (COMERUBC) : The Mexican supermarket operator said it received a restructuring proposal from derivative counterparties. Comercial Mexicana defaulted on debts in October after revealing $1.08 billion of losses related to derivatives. Comercial Mexicana rose 1.9 percent to 2.74 pesos.

LATIN AMERICAN MARKETS:

Argentina: Consumer prices rose 0.4 percent last month after increasing 0.5 percent in January, according to the median estimate of seven economists surveyed by Bloomberg. Annual inflation was 6.8 percent in February, unchanged from the previous month, the survey shows.

The National Statistics Institute is scheduled to release the report at 2 p.m. New York time.

The peso was little changed at 3.6356 per dollar.

The yield on the country’s inflation-linked peso bonds due in December 2033 rose one basis point, or 0.01 percentage point, to 19.95 percent, according to Bloomberg prices.

Brazil: The central bank will cut the benchmark Selic overnight rate by 1.5 percentage points to 11.25 percent, according to the median estimate of 49 economists surveyed by Bloomberg. A 1.5-percentage-point reduction would be the biggest since November 2003. Central bankers are slated to announce their decision after 5 p.m. New York time.

Inflation as measured by the IPCA benchmark index accelerated to 5.9 percent in February from the year-earlier period, from 5.84 percent in January, according to the median estimate in a Bloomberg survey of 20 economists. The national statistics agency is scheduled to release the price data at 8 a.m. New York time.

The real rose 1.7 percent to 2.3456 per dollar.

The yield on the zero-coupon, real-denominated bonds due in January 2010 dropped four basis points to 10.23 percent, according to Banco Votorantim SA.

Mexico: Gross fixed investment fell 2.8 percent in December after declining 2 percent the previous month, the median forecast of 14 economists in a Bloomberg survey shows.

The national statistics agency is slated to release the report at 4:30 p.m. New York time.

The peso rose 1.7 percent to 15.3144 per dollar.

The yield on Mexico’s 10 percent bond due in December 2024 fell eight basis points to 9.11 percent, according to Banco Santander SA.

Chile: The peso rose 0.7 percent to 603.5 per dollar.

The yield for a basket of Chile’s 10-year fixed-rate peso bonds fell two basis points to 2.22 percent, according to Bloomberg composite prices.

Colombia: The peso rose 1 percent to 2,527.9 per dollar.

The yield on Colombia’s benchmark 11 percent bonds due July 2020 fell one basis point to 9.73 percent, according to the central bank.

Peru: The sol rose 1.2 percent to 3.1855 per dollar.

The yield on Peru’s 8.6 percent bond maturing August 2017 was little changed at 6.66 percent, according to Bloomberg prices.

ECONOMIES: Brazil will publish February inflation figures and its SELIC target interest rate; Argentina will publish February consumer and wholesale price indexes and Mexico will publish December gross fixed investment.

To contact the reporter on this story: Laura Price in London at lprice3@bloomberg.net

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

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