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Bovespa leaps, limps and lifts
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November 13, 1998: 4:54 p.m. ET
Brazil bolsa ends on upswing, as Mexico pares all gains and Venezuela edges up
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NEW YORK (CNNfn) - The hotly awaited international loan package for Brazil, unveiled Friday morning, vied for attention with domestic issues on the major Latin American bolsas Friday.
Brazil's Bovespa index pared initial gains of more than 5 percent ahead of the package's announcement to end the day up close to 2 percent, as traders said the market had already factored in much of the good news such a loan promised -- particularly renewed investor interest in the region's largest economy.
Mexican shares found themselves in the red by half a percent by day's end as investor focus turned from the Brazil package to the government's 1999 budget proposal presented to Congress in the morning.
And in Venezuela, with trading cautious amid investor concern over presidential elections, the key index edged up half a percent.
Profit seekers pare Bovespa gains
Brazilian shares closed higher Friday after suffering wide swings as the International Monetary Fund announced a $41 billion plus credit line for the country aimed at fending off a financial crisis, traders said.
The key Bovespa index rose 144 points, or 1.93 percent, to close at 7,615 after rising more than 5 percent ahead of the loan deal.
"The bolsa opened optimistic, took profits on the facts, (and when) lower prices got attractive again … ended up," a trader at a local brokerage said.
Another trader, from Banco Marka, predicted share prices would enjoy a rebound now that the IMF package has been announced. "Prices should recover toward the end of the year … as the IMF-led loan has created more room for interest rates to fall," he said.
Adding to market volatility was an unconfirmed rumor a magazine may publish allegations of presidential wrongdoing.
While the IMF-led deal is widely expected to help Brazil avoid a financial meltdown, the market had already recovered more than 50 percent since its lowest point on expectations of international support and tough austerity measures at home.
Now markets will wait to see if the package has the hoped-for effect of luring investors back to Brazil.
Among the blue-chips, Petrobras preferred and Telebras preferred receipts led gainers with rises of 2.88 percent and 2.46 percent, respectively.
Budget proposal bats at Mexican bolsa
Mexican shares, after opening slightly higher on investor optimism over the IMF-led aid package for Brazil, lost their footing after the government's Finance Ministry presented a $100 billion spending plan for 1999 before the country's Congress.
The IPC index fell 21.08 points, or 0.52 percent, to 4007.62.
Included in the government's 1999 budget proposal is a new 5 percent tax on company dividends, including dividends paid on shares.
The tax would apply to share dividends paid by publicly quoted firms and also to profits distributed by private companies.
Cautious Caracas creeps up
Share prices on the Caracas Stock Exchange closed little changed in slow trade as investors erred on the side of caution ahead of December's presidential elections, brokers said.
The market's IBC index edged 19.09 points, or 0.53 percent, higher to close at 3,614.20.
"The bolsa's attention is fixed on the presidential election, and, as it is still not clear who will win, investors prefer to wait," one broker said.
The front-runner for the Dec. 6 vote is former coup leader Hugo Chavez, who has so far failed to convince investors he will implement market-friendly policies once in power.
Brokers said most of the market's 2.826 billion bolivar (US$5 million) trade volume Friday was concentrated in market bellwether Electricidad de Caracas and steel company Sivensa. Electricidad shares rose 3.3 percent to 150.75, while Sivensa edged up 1.7 percent to 45 bolivars. 
-- from staff and wire services
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