Latin American stocks reached near-six-month highs as optimism over global economic growth led investors to take advantage of lower equity prices but many were wary about the week ahead. The MSCI Latin American stock index gained 0.45 percent to 4,255.21, hitting August 2011 highs. The index, which is up over 18 percent this year, gained slightly this week.
Consumer confidence in the United States rose to one-year high this month and while US home sales fell last month an upward revision in prior months, offered signs the world's largest economy could support global growth. "The data that came out was positive," said Eduardo Avila, an analyst with brokerage Monex in Mexico City. "But there is still a risk in Greece."
The debt-ridden country that hovered on the brink of bankruptcy and kept global markets on edge, launched a bond swap offer to private holders of its bonds on Friday that market players are eyeing. Brazil's benchmark Bovespa stock index advanced 0.19 percent. The Bovespa is up about 16 per cent this year, nearly erasing last year's 18 percent loss.
"The Bovespa should continue its rise. There will be space for profit-taking but the trend remains positive," said William Castro Alves, an analyst with XP Investimentos in Rio de Janeiro. "People have begun returning to more volatile stocks with higher beta," he said, referring to stocks such as builders and consumer goods manufacturers, whose fluctuations tend to be wider than the market average. Castro said some risk-averse investors that had been on the sidelines are purchasing equities looking to take advantage of a recent gaining trend in the Bovespa.
Preferred shares of state-controlled oil company Petrobras drove gains in the index, rising 2.34 percent. Analysts at Bradesco BBI lowered their recommendation and price target on the shares on Friday, citing stable output and domestic fuel prices. Mining companies also gained, with Vale, the world's largest iron-ore producer adding 0.4 percent and rival MMX Mineracao, controlled by billionaire Eike Batista, rising 4.1 percent.
Mexico's IPC index fell 0.22 percent, ending the week nearly flat. Dragging down the index, cement giant Cemex dropped 6.7 percent a day after it announced that shareholders had approved a plan for the company to issue more shares to pay a dividend. Shares in Mexican pharmaceutical products company Genomma fell 7.25 percent.
The company's stock has fallen more than 16 percent this week after it offered to buy the maker of Comet and Spic and Span cleaners, for $834 million in cash, a premium of 23 percent over Prestige Brands closing share price on February 17. Chile's IPSA notched its first intraday gain in five sessions, rising 0.39 percent, though the index posted a weekly loss of 0.7 percent. A technical indicator known as the index's relative strength index remained in "overbought" territory, however, suggesting this month's rally may be short-lived. Banco Santander Chile drove gains in the index, adding 1.1 percent along with industrial conglomerate Copec up 1.0 percent.
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