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Brazil shares end at record high with Mexico's help

SAO PAULO: Brazilian shares rode on the coattails of Mexico's stellar stock performance to close at a new record high Monday, traders said.

The Sao Paulo Stock Exchange's Bovespa Index ended 1.1 percent higher at 18,125, busting the the old closing record of 18,053 set three weeks earlier January 17.

"The possibility of an upgrade in Mexico's rating came out, the Mexican stock market went up and the other markets followed suit," said Carlos Augusto Levorin, director at Oryx Asset Management in Sao Paulo.

Last Thursday, Moody's rating agency said it could soon review Mexico for possible upgrade, which would bring the country up to a coveted investment grade rating.

In Mexico Monday, the IPC index also set new peaks, rising almost 5 percent with benchmark Telefonos de Mexico leading the pack.

Traders said the Bovespa also received a late boost from the first partial reading for February of the IGP-M inflation index, which showed a rise of 0.2 percent compared to 0.7 percent in the first half of January.

Brazil's Bovespa index is now up 10.6 percent in the month of February, but its gain since January 1 sits at 6 percent.

As in Mexico, Brazil's surge was led by the telecommunications sector.

Telesp Celular, the country's biggest cellular operator, advanced an impressive 12.6 percent to 36.03 reais after posting a 31 increase in 1999 sales, traders said.

Tele Centro Sul, the fixed-line operating for central and southern Brazil, jumped 5.6 percent to 29.25 reais.

Traders attributed the rise to continued speculation that part-owner Telecom Italia will buy stock from minority shareholders as Telefonica has done with its two Brazil units.

News that Tele Centro Sul said it had assumed control of neighbouring phone company CRT had no impact on the stock, traders said. A group led by Telefonica was forced to divest CRT to adhere to regulatory rules.

In other telecom shares, benchmark Telebras receipts rose 2.1 percent to 265.50 reais and accounted for 31 percent of overall volume.

Oil giant Petrobras tacked on 1.6 percent to 454.00 reais despite news that it would have to spend an estimated 110 million reais ($61 million) on top of its fine to clean up the oil spill in Rio de Janeiro two weeks ago.

Total trading volume was a hefty 912 million reais ($515 million), a little lower than Friday's 1.04 billion reais ($588 million).-Reuters