Brazilian Stocks Plunge Amid Global Merger Wave

Strategic Insights -

Brazil's stock market took a hit on average 2.3% on September 6, 2006, with key companies like Tele Norte Leste Participacoes, Petrobras, and CVRD leading the decline. The sell-off follows a months-long battle for control of Canadian mining companies Inco and Falconbridge, which has been part of a global merger wave in the mining sector. Meanwhile, UBS revised its recommendations on Brazilian telecommunications stocks, cutting Vivo Participacoes and Telemig Celular while upgrading Brasil Telecom. Braskem, a Brazilian petrochemicals firm, announced plans to swap existing bonds for a new issue and launched a cash tender offer to buy back its existing notes.

Key Takeaways:

  • The Brazilian market dropped an average of 2.3% on September 6, 2006, with major companies experiencing significant losses.
  • Tele Norte Leste Participacoes (TNE) slumped 4% to $12.7, while Petrobras (PBR) dropped 4.6% to $86.35.
  • CVRD, Brazil's largest mining firm, fell 3.1% to $22.17, amidst reports of a potential takeover bid for Inco Ltd. (N).
  • UBS revised its recommendations on Brazilian telecommunications stocks, cutting Vivo Participacoes SA (VIV) and Telemig Celular Participacoes SA (TMB) while upgrading Brasil Telecom Participacoes SA (BRP).
  • Braskem, a Brazilian petrochemicals firm, plans to swap existing bonds for a new issue and has launched a cash tender offer to buy back its existing notes.
  • American Movil (AMX), Cemex (CX), and Telefonos de Mexico (TMX) in Mexico experienced similar declines, with shares falling 3.3%, 2.4%, and 1.3% respectively.

Statistics:

  • The Brazilian stock market dropped an average of 2.3% on September 6, 2006.
  • Tele Norte Leste Participacoes (TNE) shares declined 4% to $12.7.
  • Petrobras (PBR) shares fell 4.6% to $86.35.
  • CVRD, Brazil's largest mining firm, declined 3.1% to $22.17.
  • UBS revised its recommendations on Brazilian telecommunications stocks on September 6, 2006.

Sources:

  • Dow Jones Commodities News Select via Comtex
  • Dow Jones Newswires
  • Comtex