Paper: Itaú unit to enter stock brokerage business in March

The Argentine subsidiary of Brazilian bank Banco Itaú (NYSE: ITU) will enter the local stock brokerage business in March this year, Argentine daily Clarin reported. The local unit Itaú Buen Ayre paid 1.9mn pesos (US$644,000) to buy a share of the Buenos Aires-based Merval exchange, which permits the bank to trade Merval-listed shares. The move by Itaú is a "future bet" on increased activity in terms of equity and securities trading in Argentina as a brokerage would expand the range of services it can offer to investors, a local analyst told BNamericas. Argentina is expected to exit its default status during the first half this year and that event is likely to boost economic activity and investments, and lead to a more dynamic stock market, he added. According to the paper, the value of a Merval share is three times what it was worth at the end of 2000. However, market observers said the price paid was "reasonable" because in the 1990s prices up to US$1.8mn were paid by banks to enter the Merval exchange. Banco Itaú is the second largest private-sector bank in Brazil in terms of overall market share.