Dilma announced new incentives for the civil construction industry today in response to slower than expected economic growth. GFA3-ON is up almost 3%. If I understood correctly, I think it involves tax cuts and tariff exemptions.
I sold 15% of my position in PM, because I think we will need to correct here - if just for a day. We are stretched pretty far outside of the upper bollinger band. GFA3-ON broke above an important resistance line on the daily though.
technically it is stretched but check out volume on a daily and weekly chart. it's an air pocket all the way to R$6.73 for the local shares. not saying it won't have to cool off between here and there but as an ADR it will get a lot of momo from foreign investors. Fair Value is well into the 8s for the local shares.
Thanks, that sounds more like the news the dancing of the stock was hinting yesterday. The punchbowl by cut in rates has been price in for months now.
Meanwhile the importance of picking inflexion points on balance sheets at TOL (a double btw): “…The momentum that began in our first quarter of Fiscal Year 2012, built throughout the year…” this sort of news makes me believe $8 is actually reachable by Carnaval season. imho
btw. no one ever got hurt by taking profits. I plan to unload most of it during the final game of the World Cup, when nobody is paying attention to the stock.
"SAO PAULO, Dec 3 (Reuters) - Brazilian stocks rose on Monday
as expectations for a longer period of low interest rates fed
demand for homebuilders, though investors remained focused on
electric utilities as shareholders vote on concession renewal
Mexico's IPC stock index rose in the first session
following the inauguration of President Enrique Pena Nieto,
while Chile's bourse gained for a third straight
Homebuilders drove gains in Brazil's Bovespa after Latin
America's largest economy posted far weaker than expected growth
numbers for the third quarter on Friday.
"When the GDP numbers came out, there was a perception that
one thing the government could do to increase growth is lower
interest rates...which would positively affect the construction
sector," said Luiz Roberto Monteiro, a broker at Renascenca
Corretora in Sao Paulo.
Brazilian interest-rate futures fell across the board on
Monday, with the contract maturing in January 2014, one
of the most traded, down 11 basis points to 7.17 percent.
Shares of homebuilder PDG Realty SA added 6
percent, contributing most to the index's gains, while rival
Gafisa SA added 4.5 percent."