Shares of Brazil-based companies that trade on U.S. markets climbed sharply on Monday after the Brazilian government announced an economic stimulus package that it said it will provide the equivalent of more than $13 billion in export credits and tax cuts.
President Luis Inacio Lula da Silva said the Productive Development Policy package is designed to increase exports and industrial production and help foster innovation and competitiveness. It also increases the government's Export Financing Program.
American Depositary Receipts of U.S.-traded companies based in Brazil traded higher. Sao Paolo-based pulp and paper maker Aracruz Celulose SA climbed $5.11, or 6.3 percent, to $86.62. Earlier in the session, the ADR hit a 52-week high of $87.16.
In a note to investors, Goldman Sachs analyst Marcelo Aguiar predicted the company could be sold or consolidated with rival Votorantim Celulose Papel SA in the wake of the expiration of its shareholder agreement Sunday.
Votorantim climbed $1.38, or 4.5 percent, to $32.20.
Steel maker Gerdau SA rose $1.49, or 3.4 percent, to $44.96 after reporting a first-quarter profit of R$1.09 billion (US$646.6 million), down from R$1.18 billion a year ago. The company's stock hit a 52-week record of $45.15 earlier in the day.
Brazilian homebuilder Gafisa SA gained $1.53, or 3.7 percent, to $42.90.
Mining company Companhia Vale do Rio Doce advanced $1, or 2.5 percent, to $40.58.
Uniao de Bancos added $2.46 to $146.90.
Telecommunications company Tele Norte Celular Participaciones gained 33 cents to $23.82.
The Bank of New York Brazil ADR Index rose 13.08 points, or 2.2 percent, to 595.74. ADRs are securities that allow overseas companies to trade on U.S. markets.
The Bank of New York Composite ADR Index added 1.73 points to 184.03.
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