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 Business News | March 2007 
Stocks Rise in Best Day of Year
 El Universal
Stocks rose the most in almost five months as the U.S. Federal Reserve´s statement on interest rates alleviated concern that higher borrowing costs will crimp demand in Mexico´s biggest export market.
The Bolsa index rose 812.09, or 3 percent, to 28,219.55, its steepest gain since Oct. 31 and the biggest move among markets included in global benchmarks. The index for the first time surpassed the closing level of Feb. 26, the day before a 9 percent decline in Chinese share prices sparked a global selloff.
Mexican shares rose after the Fed Open Market Committee unexpectedly changed its statement to drop a reference to possible "additional firming" in borrowing costs.
Some traders read the change as a sign the Fed will consider cutting rates by the June policy meeting.
"The market just wasn´t expecting the Fed comments," said José Miguel Garaicochea, who manages US$625 million for the Mexico City unit of Spain´s Banco Santander Central Hispano SA. Mexico´s economy remains strong, with corporate profits rising and investors betting they can make more in Mexico´s market than in Asia or the United States, Garaicochea said in a telephone interview.
Mexican shares rose for a fifth session, boosted by shares of homebuilders, which gained on expectations mortgage lending will spur sales.
The stock exchange´s Habita index of six homebuilding companies rose 5.3 percent, the most since July.
The index had fallen 11 percent the week ending March 2, on rising mortgage delinquencies in the U.S.
"The market is realizing the Mexican mortgage situation is completely different. It doesn´t have anything to do with the U.S.," said Carlos Hermosillo, analyst at Vector Casa de Bolsa in Mexico City.
On March 19, JPMorgan Chase & Co. analyst Adrian E. Huerta raised the prices at which he expects five homebuilding companies to trade by year-end by an average of 39 percent. Huerta also raised his recommendation on Desarrolladora Homex SAB to "overweight" from "neutral."
Shares of Homex, Mexico´s second-largest homebuilder by market value, rose 5.93 pesos, or 5.9 percent, to 105.75 pesos.
Huerta said new home sales may grow 23 percent this year boosted by the growth of mortgage-backed securities, which will allow for more lending. |
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