Brazilian equities markets and its currency both saw losses on Friday as
investors engaged in profit-taking and as they braced for the possibility of more revelations in the country’s current political scandal. The real lost 0.96 percent to 2.422 to the US dollar, after a 1.68 percent gain on Thursday.

Meanwhile, the Bovespa index in Sao Paulo was down 0.52 percent to 27,258 on the heels of a 2.58 percent gain on Thursday. Almost all stocks fell on Friday, with mobile phone company TIM Participacoes falling an especially steep 3.91 percent to 4.42 reais. One of the few exceptions was Telemar, which gained 0.28 percent to 35.60 reais.

Thursday’s gains came after the ex-aide who had accused Brazilian Finance Minister Antonio Palocci of accepting bribes when he was a mayor said that he had no proof of his accusations. Investors had been worried that if proof of wrongdoing on the finance minister’s part has been produced,
Mr. Palocci might have been forced to resign, bringing on a period of
uncertainty concerning economic policy.

But some analysts were not convinced that Mr. Palocci is completely in the clear, and urged caution until it is seen whether the weekend brought any new revelations or proof of the ex-aide’s allegations.

At mid-day on Wednesday, the Toronto Stock Exchange’s S&P/TSX index had gained 0.8 percent to sit at 10,670.30 on a trading volume of 122.1 million shares.

The gains were primarily due to strength in the energy and financial sectors. Eight of the 10 groups on the TSX showed advances, with the energy group leading the way with a gain of 1.1 percent, followed by financials group at 0.7 percent higher.

The materials group also was showing a gain of 1.1 percent, with its gold subgroup gaining 1.5 percent.

Shares in energy companies were up despite a surprise report showing oil supplies in the US up last week. Suncor Energy was up 2.7 percent to C$69.03, while EnCana Corp. gained 2.4 percent to C$53.64. EnCana was helped by US Federal Energy Regulatory Commission approval of a 328-mile pipeline that will ship natural gas from the Rocky Mountains to eastern US markets. An EnCana affiliate will operate the pipeline.

In the financials sector, banks were up as they recovered from the news that Canadian Imperial Bank of Commerce will have to pay out over $2 billion to settle claims related to their involvement with collapsed US energy company Enron. CIBC gained 1.8 percent to C$72.06. Bank of Nova Scotia was up 0.9 percent to C$41.86.

Blue-chip stocks in Chile set a new record on Thursday as the initial public offering of local retailer Ripley’s helped other retailers rise on the day.

The second-largest department store chain in Chile, Ripley’s IPO raised $219 toward its expansion ambitions.

The IPO comes after two years of consolidations and share offers by other Chilean retailers.

Last year, Ripley’s reported sales of $1.22 billion and net profits of more than $60 million.

By midafternoon, shares in the retailer were trading at 518.30 pesos, well above their 480 peso auction price.

The Ripley’s IPO triggered sales in other retailers on the Santiago exchange.

Cencosud was up 2 percent to 1,003 pesos, while supermarket D&S gained 1.31 percent to 193.50 pesos.

Department store Falabella rose 3.4 percent to 1,380 pesos. By mid-afternoon local time, the ISPA blue-chip index was up 0.50 percent to 2,094.84, a new record.

The IGPA index was also up, by 0.52 percent to 9,584.91.

Proposed cuts in sugar subsidies paid by the European Union have Caribbean nations that have traditionally exported sugar to Europe wondering why they were not consulted about the new proposal in any meaningful way and why they are being given such a short time to adjust to the changes the cuts will bring.

The EU proposed this week to cut guaranteed sugar prices by 39 percent. The proposed plan gives the sugar producers only two years to make needed changes in their operations in order to compensate for lost revenues. Even though the prices the EU would pay under the plan are still over twice free market prices, the cuts will still be a burden on the nations affected.

In Guyana, which along with Jamaica will be most heavily hit by the cuts, 750,000 people make their living working in the sugar industry. The proposed EU cuts will cost the country $40 million (£22 million) in export revenues, over six times the $8 million in relief that the nation expects to receive from the recent G-8 debt relief program.

Jamaica has plans to develop alternate uses for sugar such as ethanol production and Gagasse-based generation of electricity, but officials say they will need more time than they would have under the EU proposal to put those plans into use.

The stock exchange in São Paulo, Brazil, had lost at least three percentage points in early trade on Wednesday as a political corruption scandal involving the ruling Worker’s party (PT) flared up again.

The PT has been accused of bribing some legislators as a way of securing their votes.

Earlier in the week, it looked as if the scandal was dying down after Roberto Jefferson, head of the PTB party, which is a member of the ruling coalition, could only provide circumstantial evidence that the PT had bribed legislators when he testified before a congressional panel on the issue.

However, an interview was published on Wednesday in which the former secretary of a PT aide said she had witnessed repeated deliveries of cash to government officials.

Some analysts now say that the accusations being made in the controversy have as much to do with the upcoming general election, set for October, as it does with trying to root out corruption in the government.

Especially if this is true, the scandal and the crisis that it has caused will not be over any time soon.

Investors in Brazil seemed to approve Wednesday of the announcement that Casino, the French supermarket chain, will increase its stake in CBD, Brazil’s largest retailer.

Casino will also take joint control of CBD. Preferred shares of the company on the Sao Paulo stock exchange gained 5.7 percent after the news was announced.

The deal, which is costing Casino €407 million ($527 million), will buy Casino a 50 percent share of voting rights in the company as well as a 68.8 percent stake of the capital in the holding company that now controls CBD.

The family of Abilio Diniz, which is the current principal shareholder in CBD, will keep the remaining 50 percent of voting shares. Mr. Diniz will remain chairman of the board of CBO. He will also become chairman of its holding company.

Casino will have equal representation on the two boards and will increase its operational management involvement in the company. It’s direct economic state in CBD will rise from 27.4 percent to 34.4 percent.

Claiming difficulty in dealing with expenses connected to adhering with Sarbanes-Oxley legislation, TV Azteca has announced that it will delist from the New York Stock Exchange.

The announcement Tuesday caused the value of its shares to fall 7 percent in early trading on Tuesday.

The company said that it cost too much to comply with Sarbanes-Oxley, which requires all companies listed on U.S. stock exchanges, foreign and domestic, to provide proof that they have in place internal controls to prevent accounting fraud.

TV Azteca called the legislation “excessive regulation” that was spurred by recent scandals such as those that hit Enron and Adelphia in recent years.

Two other companies controlled by Ricardo Salinas Pliego, the chairman of TV Azteca, will soon hold shareholders’ meetings to decide on delisting those companies as well. One of those companies is the largest electronics retailer in Mexico.

Some analysts believe that Sarbanes-Oxley is not the real issue for TV Azteca and other companies that have delisted from the NYSE in light of the fact that disclosure provisions in Mexican securities laws are moving in the same direction as U.S. law.

The move by Salinas Pliego’s companies come as Salinas Pliego and TV Azteca stand accused of securities fraud in both the United States and Mexico.

A libel writ was filed Thursday against TV Azteca’s chairman, Ricardo Salinas Pliego, over allegations made in a documentary aired by the Mexican network Tuesday night.

In addition, it was also announced that TV Azteca and its directors will be fined 27 million pesos ($2.4 million) for eight violations of Mexican securities laws.

The Treasury was also expected to ask the attorney general’s office to charge Salinas Pliego with fraud over charges that the TV Azteca chairman had used a Delaware company he controlled to purchase Azteca’s debt at a huge discount, which was then repurchased at face value for a personal profit to Salinas Pliego of around $109 million.

TV Azteca already has had a fraud suit filed against it by the U.S. Securities and Exchange Commission in that transaction.

Mexico’s finance minister had threatened the sanctions against Salinas Pliego and TV Azteca, according to the network, if it broadcast the documentary, which charged governmental and financial improprieties when Citigroup bought Banamex, Mexico’s largest bank, in 2001.

The finance minister, who had ties to Banamex before he became treasury minister in, denies that he tried to stop the broadcast.

TV Azteca says that he threatened to charge the network with securities laws violations if it showed the documentary.

Ricardo Salinas Pliego, the owner of TV Azteca, the second biggest broadcaster in Mexico, just can’t seem to win.

He is under investigation in Mexico and already charged by the U.S. Securities and Exchange Commission over allegations of wrongdoing in relation to the mobile phone company that he owns.

Now, his broadcasting operation is trading charges with the Mexican government over a documentary aired by the network.

The documentary in question accuses the government of wrongdoing in the acquisition by Citigroup of Mexican bank Grupo Financiero Banamex.

The documentary claims that the purchase was beset by financial irregularities. Banamex has denied the charges made in the documentary, calling them “baseless.”

Now, TV Azteca is accusing the Mexican finance minister of threatening charges of violation of securities laws against the network if they broadcast the program.

Jorge Mendoza, TV Azteca’s head of news and public affairs, says he was summoned to the finance minister’s office on Tuesday and given a written demand to either refrain from airing the program or face possible charges from the attorney general’s office.

The documentary aired Tuesday night on TV Azteca, and on Wednesday the networks news anchor, accused the finance minister of violating the network’s freedom of speech.

Japanese markets ended the week with both the Nikkei and Topix indices up on Friday. Rising crude oil prices were able to counterbalance the unexpected drop in an important quarterly survey that reports business confidence.

London financial markets, on the other hand, ended the week on an up note amid the news that 24 percent of reporting companies had higher than average earnings and another 71 percent had met their predicted earnings in the most recent reports.

Also reported to be a factor were several vigorous takeover attempts. The New York markets ended the week and began the second quarter on the downturn after better results earlier in the week.

Reported reasons for the late-week decline included new concerns over inflation, the uncertain state of oil prices, and a report that fewer than expected jobs had been created outside the farm sector.