Latin Day Ahead: Mexico to Increase Funding for IMF, Ortiz Says

Mexico may increase financing for the IMF; The credit-defaults swaps market, which shows Mexico is a riskier credit than Brazil, is wrong, according to a Mexican finance ministry official; Leaders of Brazil, Russia, India and China will probably press the case that their 15 percent share of the world economy and 42 percent of global currency reserves should give them more clout; Wreckage from the Air France plane crash will arrive in Brazil today.

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Mexico to Increase Funding for IMF, Central Bank’s Ortiz Says

Mexico may join Russia, Brazil and China in increasing financing for the Washington-based International Monetary Fund, Mexican central bank Governor Guillermo Ortiz said.

Credit-Default Swaps Misprice Mexico Risk, Debt Office Says

The credit-default swaps market, which shows Mexico is a riskier credit than Brazil, is wrong, said Gerardo Rodriguez, head of public credit at the Mexican Finance Ministry.

El-Erian Says Summit Shows ‘Rebalancing’ as BRICS Buy IMF Bonds

Leaders of Brazil, Russia, India and China will probably use their first summit next week to press the case that their 15 percent share of the world economy and 42 percent of global currency reserves should give them more clout.

Air France Jet Wreckage to Arrive in Brazil Today for Probe

Wreckage from the Air France jet that crashed last week in the Atlantic Ocean killing 228 people will arrive in Brazil today as authorities try to determine what caused the disaster.

MAIN COMPANIES:

Argentina

Petrobras Energia Participaciones SA (PBE AF): Argentina’s oil refinery workers postponed a strike set for yesterday as the Labor Ministry ordered five more days of negotiations, a union leader said. Petrobras Energia, the Argentine unit of Brazil’s state-controlled oil company, rose 3.1 percent to 2.3 pesos.

Brazil

Petroleo Brasileiro SA (PETR4) (PETR4 BS): Brazil’s state- controlled oil company had its debt rating cut one level to BBB- , the lowest investment grade rating, from BBB by Standard & Poor’s, S&P said June 10 in a statement. Petrobras rose 1.1 percent to 33.88 reais on June 10.

Vale SA (VALE5) (VALE5 BS): The world’s largest iron-ore producer is poised to benefit as the Brazilian economy rebounds, Federated Investors Inc. said. Vale rose 1.1 percent to 33.45 reais on June 10.

Hypermarcas SA (HYPE3) (HYPE3 BS): The Brazilian consumer products company said its board approved a partial company split effective July 1. Hypermarcas will absorb the industrial assets belonging to its subsidiary Cosmed Industria de Cosmeticos e Medicamentos SA after the split, the Sao Paulo-based company said in a statement sent to Brazil’s securities commission. Hypermarcas rose 5.5 percent to 21.80 reais on June 10.

Mexico

Grupo Elektra SA (ELEKTRA*) : Grupo Salinas, the parent company of electronics retailer Elektra, will begin selling second-hand cars through a program called Autos Elektra. Grupo Salinas will provide financing for car purchases through its Banco Azteca unit, Grupo Salinas said in an e-mailed statement. Elektra fell 0.9 percent to 613.18 pesos.

Controladora Comercial Mexicana SAB (COMERUBC) : It is “probable” that Comercial Mexicana, the retailer that defaulted on debts in October, will reach a deal with creditors, Citigroup Inc. said. Still, the stock’s associated risk “remains very high,” analyst Eduardo Estrada wrote yesterday in a research note. Comercial Mexicana rose 2.4 percent to 7.30 pesos.

Grupo Financiero Banorte SAB (GFNORTEO) : Mexico will see “a rapid rate of disinflation” in the coming months, and inflation will slow to about 4 percent by the end of the year, Central Bank Governor Guillermo Ortiz said yesterday. Banorte, Mexico’s largest publicly-traded lender, rose 4 percent to 32.64 pesos.

LATIN AMERICAN MARKETS:

Colombia: The central bank will release minutes of its May 29 monetary policy meeting. Policy makers, led by bank chief Jose Dario Uribe, last month lowered the overnight lending rate a full percentage point to 5 percent.

Colombia’s long-term foreign currency rating was raised yesterday to investment grade at Toronto-based ratings company DBRS, which cited the “steady improvements that Colombia has made in debt management, macroeconomic policy credibility and public security.” Standard & Poor’s, Fitch Ratings and Moody’s Investors Service rate Colombia one level below investment grade.

The peso jumped 1.9 percent to 2,015.92 per dollar.

The yield on Colombia’s benchmark 11 percent bonds due July 2020 fell 11 basis points, or 0.11 percentage point, to 9.33 percent, according to Colombia’s stock exchange.

Other prices in Latin American markets:

Brazil: Markets were closed yesterday for a national holiday.

The real strengthened 1.2 percent to 1.9240 per dollar.

The yield on the zero-coupon, real-denominated bond due in January 2010 fell five basis points to 9.32 percent on June 10, according to Banco Votorantim.

Argentina: The peso advanced 0.3 percent to 3.7512 per dollar.

The yield on the country’s inflation-linked peso bonds due in December 2033 fell 18 basis points to 18.22 percent, according to Citigroup Inc.’s local unit.

Chile: The peso rose 0.6 percent to 562.45 per dollar.

The yield for a basket of Chile’s 10-year fixed-rate peso bonds dropped 13 basis points to 2.96 percent, according to Bloomberg composite prices.

Mexico: The peso rose 1.7 percent to 13.3512 per dollar.

The yield on Mexico’s 10 percent bond due December 2024 fell four basis points to 8.46 percent, according to Banco Santander SA.

Peru: The sol gained 0.1 percent to 2.9772 per dollar.

The yield on Peru’s 8.6 percent bond maturing August 2017 rose 18 basis points to 5.75 percent, according to Citigroup Inc.’s unit in Lima.

ECONOMIES: Colombia will publish its central bank policy minutes and Venezuela will publish its weekly crude oil basket.

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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