Equities BBVA Research Monday, January 5, 2004

LATIN AMERICA

Latin America Market Monitor Research Ideas from BBVA

Regional Market Snapshot (1/2/04) Change in US$ (%) ADR

(US$) Vol. (000) Day YTD

Telecom Telmex 33.11 64.61 0.2 0.2%Am. Movil 28.32 38.97 3.6 3.6%Telemar 15.57 15.14 0.9 1%Brasil Tel. 38.29 6.56 1.3 1.3%Telesp Cel. 6.43 4.69 -2.3 -2.3%Tel. Chile 6.12 1.44 (0.01) -1%CANTV 33.11 64.61 0.2 0.2%

Financials Bco. Itau 48.74 5.22 (0.00) 0%Unibanco 25.00 10.90 0.00 0%Bradesco 26.30 6.58 (0.00) 0%Bco. Do Brasil 8.23 1.93 (0.01) -1%BBVA Banc*. 0.88 10.09 0.03 3%GF Norte* 3.52 2.39 0.01 1%Credicorp 13.39 0.41 0.00 0%Santander 23.65 2.15 (0.01) -1%

Basic Materials Cemex 26.45 26.38 0.01 1%CVRD 52.99 19.65 0.03 3%Petrobras 30.20 32.00 0.03 3%Aracruz 35.20 8.27 0.00 0%Buenaventura 28.06 0.29 (0.01) -1%

Retail& Beverages Walmex* 28.65 1.46 0.01 1%PaodeAcucar 25.08 3.06 (0.00) 0%Femsa 37.01 12.25 0.00 0%KOF 21.03 3.66 (0.01) -1%Ambev 25.92 13.75 0.02 2%Andina 10.65 0.20 0.01 1%DYS 21.55 1.92 0.04 4%CCU 21.74 0.51 0.01 1%Comerci* 20.50 0.04 0.04 4%

Media Televisa 40.08 18.73 0.01 1%TVAzteca 9.20 5.52 0.01 1%

Other Embraer 35.40 15.76 0.01 1%GEO 5.18 1.53 0.01 2%ARA 2.53 1.55 0.02 2%

ECONOMICS 2004 looks to be a difficult year for emerging market debt, with trading strategies focused on a possible H104 sell off in the US Treasury market and a H204 risk of contracting global liquidity. Through Q104, we anticipate high global liquidity continuing to support the current record EM debt levels. This follows an exceptional 2003 performance that increased total returns by 28.6%, led by strong inflows resulting from excess global liquidity. The EMBI+ spread over UST tightened by 341bps during the year to close at 418bp. Ecuador led the pack with a 99.7% total yearly return, followed by Brazil with a 68.3% return and Venezuela with a 50.4% return. The Latin component of tEMBI rallied by 35.1% versus a 20.2% return on the non-Latin

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so

drawal of funds from EM by yea

p The regional currencies begin 2004 on a positive note following the remarkable appreciation of 2003 with the exception of both the Mexican peso (closing the year 7.7% weaker) and the Venezbolivar (following a 13.3% devaluation last February.) ThBrazilian real and the Chilean peso showed the strongest appreciation in the region. The real strengthened by 21.9% on the turnaround of expectations and good policies driving country riskdownwards and the peso by 21.7% on the revival of growth and strong copper prices. The Argentine peso followed with a 13.9% appreciation on the back of a trade and current account surplus adespite disappointments on fundamentals, even the Colombian peso posted a 3.2% appreciation, given strong capital repatriation in 2003. We expect this pattern to continue through at least the firsthalf of 2004, as the LatAm currencies benefit from the supportiexternal environment, global and regional economic recovery, stronger commodity prices and weaker dollar (the Mexican peremaining on the weaker side for now). The risk to our 2004 outlook would involve a sudden with

MEXICO On December 30, Congress approved the Ps1,650bn 2004 budget (Ley de Egresos) with a 370 to 93 vote led by the PAN, PRI, PTPVEM and Convergencia parties with the PRD voting against. The approved budget was in line with the austere proposals of the government, following the total failure to approve any tax reform initiative, instead bringing about another weak fiscal miscell

,

aneous (Ley de Ingresos) reminiscent of the one approved in 2001.

Page 7

r-end as liquidity gets squeezed. Page 3

*Price and % change in P$ Source:Bloomberg

REFER TO IMPORTANT DISCLOSURES AT THE END OF THIS REPORT BBVA and/or any of its affiliates has, or could have, a business relationship, including that of a commercial or investment banking nature, with any of the companies mentioned in this report. Please see the accompanying disclosures at the end of this report for the Analyst Certification.

BBVA Research

Trading Desk Notes

There were no Trading Desk Notes for Friday, January 2, 2004.

Latin America Market Performance and BBVA Valuations (1/2/04) Argentina Brazil Chile Mexico Peru Merval Bovespa IPSA IPC IGBVL Latin America Indices Index Close 1,102 22,445 1,485 8,818 2,494 % ch day (local curr.) 2.8 0.9 0.0 0.3 2.4 % ch day (US$) 3.2 1.4 1.3 1.6 2.4 % ch week (US$) 7.2 4.5 2.9 3.4 8.2 % ch quarter (US$) 29.9 30.6 13.1 14.9 23.6 % ch 12 month (US$) 136.0 124.3 79.2 32.5 77.6 Mkt cap (US$bn)* 13.75 142.2 61.7 100.9 15.8 Key Market Data EMBI+ NA NA NA NA NA Local Currency/US$ 2.93 2.88 585.40 11.07 3.46 BBVA Latin America Valuations P/E 03E (x) nmf NA 27.1 13.9 16.4 P/E 04E (x) 11.2 NA 22.6 12.2 51.7 EV/EBITDA 03E (x) 6.5 NA 10.1 7.1 NA EV/EBITDA 04E (x) 5.6 NA 8.0 6.4 NA EPS Growth 04E (%) nmf NA 20% 14% -68% Ebitda Growth 04E (%) 27% NA 9% 9% 16% P/BV 03 (x) 2.1 NA 1.9 2.5 NA P/CF 03 (x) 26.8 NA -10.1 8.6 NA All market capitalization data sourced from Bloomberg except for Argentina, which reflects our coverage universe. Source: Bloomberg, Reuters and BBVA Latin America Equities estimates

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LATIN AMERICA LATIN AMERICA Economics Monday, January 5, 2004BBVA ResearchLATIN AMERICA

Latin America Amalia Estenssoro

BBVA Securitiesamalia.estenssoro@bbvany.com

212.728.2340

Economic Update

Fixed Income & Foreign Exchange Overview 2004 looks to be a difficult year for emerging market debt, with trading strategies focused on a possible H104 sell off in the US Treasury market and a H204 risk of contracting global liquidity. Through Q104, we anticipate high global liquidity continuing to support the current record EM debt levels. This follows an exceptional 2003 performance that increased total returns by 28.6%, led by strong inflows resulting from excess global liquidity. The EMBI+ spread over UST tightened by 341bps during the year to close at 418bp. Ecuador led the pack with a 99.7% total yearly return, followed by Brazil with a 68.3% return and Venezuela with a 50.4% return. The Latin component of the EMBI rallied by 35.1% versus a 20.2% return on the non-Latin part of the index. The regional currencies begin 2004 on a positive note following the remarkable appreciation of 2003 with the exception of both the Mexican peso (closing the year 7.7% weaker) and the Venezuelan bolivar (following a 13.3% devaluation last February.) The Brazilian real and the Chilean peso showed the strongest appreciation in the region. The real strengthened by 21.9% on the turnaround of expectations and good policies driving country risk downwards and the peso by 21.7% on the revival of growth and strong copper prices. The Argentine peso followed with a 13.9% appreciation on the back of a trade and current account surplus and despite disappointments on fundamentals, even the Colombian peso posted a 3.2% appreciation, given strong capital repatriation in 2003. We expect this pattern to continue through at least the first half of 2004, as the LatAm currencies benefit from the supportive external environment, global and regional economic recovery, stronger commodity prices and weaker dollar (the Mexican peso remaining on the weaker side for now). The risk to our 2004 outlook would involve a sudden withdrawal of funds from EM by year-end as liquidity gets squeezed.

Brazil On Thursday, the CPI-FIPE will announce annual inflation figures near 8%, providing increased credibility for the central bank after one year of PT government. Also on Thursday, the very important industrial production numbers for November will be released, and we anticipate a positive performance in both the seasonally adjusted and annual readings. The trade balance posted a record surplus of $24.8bn in 2003, with 21.1% YoY export growth, slightly more than half of which was price-driven rather than based on a volume increase. Additionally, imports grew by 2.2% YoY. We expect the pattern of growth between exports and imports to reverse in 2004, reducing the trade surplus result to around $18bn in 2004, a very good result nonetheless. Commodity prices maintain their momentum with possible risks

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BBVA Research

linked to a trend shift leading to tightening policy in Asia, which is not expected in the near future. Annual Brazilian trade balance and three-month export/import growth

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Mexico This Friday, at the first monetary meeting of the year, the central bank is unlikely to adjust current policy (just yet), but special attention will be given to any risk of inflation pass-through from a weaker exchange rate following the release of Thursday’s 2003 annual inflation numbers. 2003 inflation approached 4.0% compared to a target of 3.0% with a +/- one percentage point band around the target; just enough to maintain central bank credibility for now. But we believe there remains a possibility for H104 central bank action if the currency continues to weaken from its Ps11.237 year-end close. The domestic fundamental issues driving the currency are more or less set and we anticipate no additional weakness; however, the other variable affecting the currency, the dollar weakness, still has room for adjustment. The fiscal balance posted a surplus of Ps10bn in November, bringing the year-to-date surplus to Ps52.9bn in line with the target for the year (deficit of 0.5% of GDP) given that December usually posts a strong deficit. The YTD surplus was driven by a primary result 20.7% higher in real terms than last year thanks to higher than expected revenues. Oil-related revenues were up by 24%, tax revenues by 5.9% (VAT alone by 11.7%) and non-tax and non-oil revenues were up by 7.4%. Higher revenues allowed for expenditure increases of 10.3% in real terms YTD.

Chile After December’s 50bps surprise cut of the policy rate to 2.25%, it is unlikely that the central bank will move again in January. As a result, we expect no change in rates on Thursday. The rationale of the latest cut has more to do with the short-term risk of inflation posting negative readings and the index staying below the 2-4% range target for several months in early 2004, than to its medium to long term prospects. We predict inflation will return to its target

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BBVA Research

range of 2.4% to end the year in 2004. Last month’s policy easing was possible due to the strong appreciation of the currency so far, backed by strong copper prices that still have momentum in H104. We have adjusted our FX forecast for 2004 and 2005 to P$590 and P$580 due to our upward revision of copper prices to $0.93 cents/lb and $0.95 cents/lb, respectively. Looking forward, the central bank will move towards a more neutral policy, but not before the second half of the year, which makes policy very supportive of growth.

Colombia During the final weeks of the year, Congress approved and ratified (avoiding any constitutional challenge in 2004) a weak tax reform intended to replace the fiscal discipline compromised by October’s referendum loss. Not only did the new reform change its structure in Congress, compared to the one presented by the executive, but actually fell Ps800mn (0.3% of GDP) short of its target. This action validates our fiscal deficit forecast of 2.8% of GDP vis-à-vis the adjusted IMF target of 2.5% of GDP for 2004. The new measures approved include: 1) wealth tax of 0.3% on assets above Ps3bn, 2) hike in the financial transactions tax to 4 x 1,000 up from 3 x 1,000, 3) surcharge on income tax of 10% for three years bringing the marginal tax rate to 38.5% and 4) anti-evasion measures. The first two measures were a Congressional response to the original VAT tax increase, reduced income tax exemption and tax on pensions proposed by the government that did not go through. Clearly the adjustment is less than optimal and by February a Congressional commission should again be looking into further tax and pension reforms prior to the congressional session that starts in March. The proposals will once again include widening the VAT base and taxing pensions, however, the government will have to do a lot better on its negotiating political skills for any type of reforms to have a chance.

Venezuela Consumer prices rose by 1.8% MoM in December, bringing the 2003 annual inflation to 27.1%, below the 31.2% in 2002, and in line with expectations. The restrained price increases following the February depreciation can be explained by the resulting FX peg. Nonetheless, we would expect inflation to crawl slowly upwards in 2004 to 30%.

Argentina 2003 tax revenues are expected to increase by 42% pending today’s (Monday) release of the December numbers. The rebound of economic activity has supported higher VAT collection and the improving results will most likely help the government to outperform the primary fiscal target set with the IMF. Nonetheless, due to the lack of political will necessary to initiate any debt restructuring negotiations, the IMF has postponed the review and approval of any withdrawal of the agreement.

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BBVA Research

Upcoming Data Releases

Date Country Events Period Forecast

5 Jan Argentina Tax collection Dec Ps6.3bn (preliminary) 5 Jan Colombia CPI 2003 6.0% YoY (BBVA) 6 Jan Chile CPI 2003 1.5% YoY (BBVA) 6 Jan USA ISM non manufacturing Dec 60.8% (consensus) 6 Jan USA Factory orders Nov -1.3% (consensus) 7 Jan Argentina CPI/WPI 2003 3.5% YoY CPI (BBVA) 8 Jan Brazil Industrial production Nov 8 Jan Brazil CPI-FIPE 2003 8.0% YoY (BBVA)

8 Jan Chile Monetary policy meeting Jan No change from the 2.25% policy rate

8 Jan Mexico Trade balance (review) Nov -$779mn (preliminary) 8 Jan Mexico CPI 2003 3.9% YoY (BBVA)

8 Jan ECB Monetary policy meeting Jan No change: 2% reference rate (consensus)

8 Jan USA Initial jobless claims Jan 345K (consensus)

9 Jan Mexico Monetary policy meeting Jan No change in the ‘corto’ (Ps 25mn per day)

9 Jan Mexico IGAE Oct 9 Jan Mexico Consumer confidence Dec 9 Jan Peru Trade balance Nov 9 Jan USA Unemployment Dec 5.9% (consensus)

Source: BBVA Securities

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LATIN AMERICA LATIN AMERICA Economics Monday, January 5, 2004BBVA ResearchMEXICO

Mexico 2004 Budget Amalia Estenssoro

BBVA Securitiesamalia.estenssoro@bbvany.com

212.728.2340

A familiar story: fiscal discipline without

structural improvements

On December 30, Congress approved the Ps1,650bn 2004 budget (Ley de Egresos) with a 370 to 93 vote led by the PAN, PRI, PT, PVEM and Convergencia parties with the PRD voting against. The approved budget was in line with the austere proposals of the government, following the total failure to approve any tax reform initiative, instead bringing about another weak fiscal miscellaneous (Ley de Ingresos) reminiscent of the one approved in 2001. The market, disappointed with the fiscal reform, was reassured with the austere budget and the peso opened the year on a more reassuring note (Ps11.078) after closing 2003 at Ps11.2372. Given lower estimated revenues (oil and non-oil related) and the increase in non-programmable expenditures, the 2004 estimated 0.3% of GDP budget deficit target compared favorably with the 0.6% expected deficit of 2003, implying a fiscal tightness of 0.9% of GDP. The brunt to the adjustment will be borne by lower programmable expenditures, down 4% in real terms from 2003. The main assumptions of the 2004 budget approved as shown below: Estimates as % of GDP 2003 2004 Revenues 23.3 22.5 Oil related 7.8 7.1 Non-oil related 15.5 15.4 Expenditures 23.7 22.8 Programmable 17.2 16.2 Non-programmable 6.5 6.7 Budget balance (as % of GDP) -0.6 -0.3 PSBR (as % of GDP) 3.1 2.7 Without recurrent revenues 1.14 (to Sept 03) 3.3 Government assumptions: GDP growth (%) 1.5 3.1 CPI (%) 3.8 3.0 FX (Ps/$) 10.7 11.2 Interest rates (28-day Cetes) Average 6.5 6.5 Real rates 2.7 3.6 Current account (as % of GDP) 1.9 2.6 International assumptions: Oil price (Mexican basket, $/bbl) 24.2 20.0 USA GDP (%) 2.8 3.8 USA Industrial production (%) 0.2 4.0 USA CPI (%) 2.1 1.8

Source:SHCP Congress introduced few changes to the 2004 budget, only reassigning Ps38bn of the total by cutting federal expenditure (Ps27.8bn) while increasing the overall revenue assumption (Ps11bn) based on higher tax collection estimates. The majority of changes were superficial given the small room allowed

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BBVA Research

by the approved fiscal miscellaneous. The latter went against all the government tax proposals, especially the introduction of VAT on food and medicines, following the internal civil war in the opposition PRI party. Among the items approved in the fiscal miscellaneous was the elimination of the 20% special tax on cigarettes, resulting in a fiscal cost of Ps2.7bn.

Were the automatic stabilizers dismantled? Congress also stipulated that in the case of higher than expected oil revenues, the legislative branch would decide how to spend the windfall. It remains unclear if the decision conforms to previous rules that allowed for 50% of the windfalls to be used on federal infrastructure projects, 25% for the oil stabilization fund and the last 25% to pay up debt, given discretion to only part of the windfall. It remains possible that the 2004 budget, for which there are very few published details, actually dismantled the automatic rules altogether (rules that were already diluted in 2002 vis-à-vis its 2001 version). Most likely the latter assumption is correct, which would actually be a net negative to the whole process, despite the lower deficit target. The lack of any serious structural reforms implies that infrastructure investment will continue via Pidiregas (private financed public expenditure) expected for 2004 to reach 1.5% of GDP, up 0.2% from 2003 and 0.4% on the original government estimate laid down at the Pronafide multi-annual plan. The total public sector borrowing requirement (PSBR) for 2004, officially estimated to be 2.7% of GDP (including Pidiregas cost among others), is the proper fiscal deficit for international comparisons. This compares to an official estimate of 3.1% of GDP for 2002, though we only have data through last September when the PSBR stood at 1.14% of GDP. Q4 is traditionally the high seasonal deficit period. So, despite lack of reforms, the government is once again able to take credit for a downward trend and fiscal discipline. As a result of the disappointing tax reform (the second time for this administration), we certainly do not expect any advance in the 2004 electricity reform, which requires constitutional changes backed by a qualified majority. However, the tax reform discussions will continue, even after this fiasco, given that it is the only possible way for higher expenditure going forwards that is demanded by opposition governors. Most likely, the discussions will not benefit this administration, but will help to differentiate the various sectors inside the PRI and shape up a consensus around the issue for the future. Meanwhile it is business as usual: there are no reforms, but there are hardly any expenditures either.

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Economics Monday, January 5, 2004BBVA Research LATIN AMERICA .

Annual Economic Forecasts ARGENTINA BRAZIL CHILE COLOMBIA

2001 2002 2003E 2004E 2001 2002 2003E 2004E 2001 2002 2003E 2004E 2001 2002 2003E 2004EReal GDP growth (%change) -4.4 -10.8 7.2 4.8 1.4 1.9 0.0 3.0 3.1 2.1 3.2 4.5 1.4 1.7 3.2 3.0 Consumer prices (%change) -1.5 41.0 3.5 7.0 7.7 12.5 9.0 5.5 2.6 2.8 1.5 2.4 7.6 7.0 6.0 5.5 Trade balance FOB-FOB ($bn) 7.5 17.2 16.6 16.1 2.6 13.1 24.8 18.0 2.1 2.5 3.2 3.6 0.5 0.0 -0.2 -0.8 Current account balance $ bn -4.5 9.6 9.2 8.7 -23.2 -7.8 2.0 -5.0 -1.2 -0.6 0.07 -0.2 -1.2 -1.6 -1.7 -2.3 %GDP -1.7 9.8 8.4 6.7 -4.5 -1.7 0.4 -0.9 -1.7 -0.8 0.1 -0.2 -1.5 -2.0 -2.1 -2.8 International reserves ($bn) 14.6 10.5 13.5 15.5 35.9 37.8 49.3 47.0 14.4 15.4 16.1 16.9 10.2 10.9 10.9 10.0 Exchange rate (year end vs US$) 1.00 3.40 2.95 3.00 2.31 3.54 2.90 3.40 661 720 592 590 2,277 2,867 2,778 3,100Fiscal balance (% of GDP) -3.3 -1.4 0.9 0.7 -5.3 -10.4 -5.5 -2.9 -0.3 -0.8 -1.3 -0.6 -3.3 -3.6 -3.3 -2.8 Short-term interest rate (Y/E, %) 6.3 27.9 5.0 8.0 19.0 25.0 16.5 14.5 6.5 3.0 2.3 3.0 11.5 7.7 7.9 8.5 (*)30-daydeposit (*)Selicovernight (*)Targetinterbank(nominal) (*)90-dayDTF

MEXICO PERU VENEZUELA

2001 2002 2003E 2004E 2001 2002 2003E 2004E 2001 2002 2003E 2004EReal GDP growth (%change) -0.3 0.9 1.1 2.5 0.2 5.2 4.0 3.7 2.7 -8.9 -9.6 8.2 Consumer prices (%change) 4.4 5.7 3.9 4.7 -0.1 1.5 1.5 2.0 12.3 31.2 27.1 30.0 Trade balance FOB-FOB ($bn) -10.0 -8.0 -6.0 -10.0 -0.3 0.3 0.4 0.4 9.3 13.9 13.6 11.7 Current account balance $bn -18.0 -14.1 -12.8 -15.7 -1.2 -1.2 -1.2 -1.2 3.9 7.7 9.0 5.8 %GDP -2.9 -2.2 -2.1 -2.5 -2.2 -2.1 -2.0 -2.0 3.1 7.6 10.8 7.0 International reserves ($bn) 40.9 48.0 56.6 58.9 8.6 9.2 10.4 10.7 18.5 14.8 21.0 22.8 Exchange rate (end year vs US$) 9.16 10.37 11.24 11.43 3.44 3.51 3.46 3.53 763 1,389 1,600 2,600 Fiscal balance (%o f GDP) -0.7 -1.3 -0.5 -0.5 -2.5 -2.3 -2.0 -1.8 -4.0 -3.0 -4.5 -5.1 Short-term interest rate (Y/E, %) 6.8 7.0 5.6 6.7 3.3 3.6 2.3 2.8 18.0 26.8 40.0 27.0 (*)28-dayCetes (*)Interbank (*) Certificado de participacion

Quarterly Economic Forecasts ARGENTINA BRAZIL CHILE COLOMBIA

GDP(%)

CPI(%)

FX end-

GDP(%)

IPCA-CPI

FX end-

GDP(%)

CPI(%)

FX end-

GDP(%)

CPI(%)

FX end-

y/y y/y Period y/y (%)y/y Period y/y Y/y period Y/y y/y Period 1Q 2002 -16.3 7.9 2.94 -0.8 7.7 2.31 1.3 2.6 657 0.5 5.9 2,273 2Q 2002 -13.5 28.4 3.81 1.0 7.7 2.33 1.7 2.0 686 2.3 6.2 2,404 3Q 2002 -9.8 38.5 3.74 2.5 7.9 3.82 2.4 2.3 749 1.9 6.0 2,870 4Q 2002 -3.6 41.0 3.36 3.4 12.5 3.54 3.2 2.8 720 2.0 7.0 2,867 1Q 2003 5.4 31.7 2.97 2.0 16.6 3.35 3.6 4.5 733 3.9 7.6 2,958 2Q 2003 7.7 10.2 2.81 -1.4 16.6 2.84 2.7 3.6 701 2.2 7.2 2,817 3Q 2003 9.8 3.5 2.92 -1.5 15.1 2.90 3.2 2.2 661 3.9 7.1 2,906 4Q 2003 7.0 3.5 2.95 1.0 9.0 2.90 3.0 1.5 592 2.6 6.0 2778

1Q 2004E 5.4 3.4 2.90 1.6 4.7 3.10 3.5 0.4 580 2.0 5.8 2,960 2Q 2004E 5.0 5.0 3.00 4.2 4.6 3.20 4.6 1.6 590 3.8 5.2 3,000 3Q 2004E 5.0 5.8 3.10 4.3 5.0 3.30 4.8 1.6 580 3.5 5.5 2,980 4Q 2004E 3.8 7.0 3.00 2.0 5.5 3.40 4.8 2.4 590 2.7 5.5 3,100

MEXICO PERU VENEZUELA

GDP(%) CPI(%) FX end- GDP(%) CPI(%) FX end- GDP(%) CPI(%) FX end- y/y y/y Period y/y y/y Period y/y y/y Period

1Q 2002 -2.2 4.7 9.04 3.2 -1.1 3.44 -3.8 17.6 906 2Q 2002 2.0 4.9 9.95 6.3 0.0 3.51 -9.1 19.6 1,380 3Q 2002 1.8 4.9 10.21 5.0 0.7 3.63 -5.6 28.2 1,463 4Q 2002 1.9 5.7 10.37 4.7 1.5 3.51 -16.7 31.2 1,389 1Q 2003 2.3 5.6 10.77 6.0 3.4 3.48 -27.6 34.1 1,600 2Q 2003 0.2 4.2 10.46 3.6 2.2 3.47 -9.4 34.2 1,600 3Q 2003 0.4 4.0 10.99 3.5 2.0 3.48 -7.1 26.6 1,600 4Q 2003 1.7 3.9 11.24 3.8 1.5 3.46 6.0 27.1 1,600

1Q 2004E 2.6 3.9 11.38 3.0 0.8 3.50 17.0 21.4 1,600 2Q 2004E 2.3 4.8 11.34 3.2 1.4 3.52 10.0 24.0 1,600 3Q 2004E 3.1 4.9 11.42 4.0 1.7 3.50 4.0 27.7 2,550 4Q 2004E 2.1 4.7 11.43 4.2 2.0 3.53 2.0 30.0 2,600

Source: BBVA Securities estimates

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Latin America Market Monitor

BrazilLast 12 Month Upside Share Market Most EV/

Bloomberg Price Price Tgt. Potential Volume Cap recent P/E P/E EBITDACompany Ticker Rating (US$)* (US$) (%) (mn) ** (US$mn) Day Week Month YTD P/BV 03E 04E 03EFixed Line TelecomTelemar TNE Outperf. 15.57 18.00 16% 15.14 5,753 0.9% 2% 9% 1% 1.10 259.50 14.03 4.1Brasil Telecom BRP Outperf. 38.29 51.00 33% 6.56 2,691 1.3% 5% 0% 1% 0.75 17.17 11.67 2.6Embratel EMT Hold 16.44 14.00 -15% 1.02 1,095 -1.0% 5% -11% -1% 0.44 loss loss 5.3Wireless TelecomTelesp Celular TCP NR 6.43 NA NA 4.69 3,839 -2.3% -5% -9% -2% NA NA NA NAT. Centro Oeste TRO NR 9.85 NA NA 1.96 1,245 0.0% -3% -7% 0% NA NA NA NAT. Nordeste Celular TND NR 27.89 NA NA 0.41 482 -0.2% -5% 1% 0% NA NA NA NATelemig Celular TMB NR 32.65 NA NA 1.78 556 1.7% -4% -7% 2% NA NA NA NATele Celular Sul TSU NR 14.06 NA NA 0.55 482 -2.0% -5% 2% -2% NA NA NA NATele Leste Celular TBE NR 13.40 NA NA 0.06 128 -3.4% -5% 10% -3% NA NA NA NATele Norte Celular TCN NR 10.75 NA NA 0.08 72 -1.6% -3% 9% -2% NA NA NA NAPetroleumPetrobras PBR NR 30.20 NA NA 32.00 33,098 3.3% 6% 19% 3% NA NA NA NAMiningCVRD RIO-P NR 52.99 NA NA 19.65 20,340 2.9% 4% 22% 3% NA NA NA NAAeronauticsEmbraer ERJ NR 35.40 NA NA 15.76 6,290 1.1% 2% 16% 1% NA NA NA NAUtilitiesCemig CIG NR 18.80 NA NA 3.36 145 2.2% 7% 17% 2% NA NA NA NACelesc CLSC6 BZ NR 0.30 NA NA 2.00 1 5.4% 1% 14% 5% NA NA NA NACESP CESP4 BZ NR 5.11 NA NA 0.98 45 3.0% 4% 0% 3% NA NA NA NACopel ELP NR 4.83 NA NA 1.65 23 1.3% 4% 12% 1% NA NA NA NAEletrobras CAIGY NR 7.40 NA NA 0.44 48 -5.7% -3% 4% -6% NA NA NA NAEletropaulo ELPL4 BZ NR 24.56 NA NA 2.32 121 -2.5% 1% 6% -2% NA NA NA NALight LIGH3 BZ NR 27.55 NA NA 0.65 168 -0.3% -7% 31% 0% NA NA NA NATransmissao Paulista TRPL4 BZ NR 4.74 NA NA 0.71 23 -1.1% -1% 8% -1% NA NA NA NAWater UtilitiesSabesp SBS NR 14.14 NA NA 0.98 1,611 1.7% 6% 10% 2% NA NA NA NASteel Gerdau GGB NR 21.15 NA NA 2.88 2,400 4.6% 9% 23% 5% NA NA NA NACSN SID NR 55.00 NA NA 8.04 3,945 2.6% 9% 20% 3% NA NA NA NACST CSTB4 BZ NR 35.92 NA NA 3.83 1,831 2.8% 13% 22% 3% NA NA NA NABelgo Mineira BELG4 BZ NR 250.78 NA NA 0.69 1,696 -1.2% 0% 11% -1% NA NA NA NAAcesita ACES4 BZ NR 0.61 NA NA 2.64 452 7.8% 6% 23% 8% NA NA NA NAUsiminas USIM5 BZ NR 11.77 NA NA 9.39 2,653 0.3% 8% 21% 0% NA NA NA NAPulp & PaperAracruz ARA NR 35.20 NA NA 8.27 3,629 0.5% 2% 18% 0% NA NA NA NAVCP VCP NR 32.30 NA NA 3.45 2,466 3.0% 3% 13% 3% NA NA NA NAKlabin KLBN4 BZ NR 1.36 NA NA 2.00 1,250 4.7% 3% 6% 5% NA NA NA NASuzano SUZA4 BZ NR 4.45 NA NA 1.46 1,148 1.3% 6% 20% 1% NA NA NA NARipasa RPSA4 BZ NR 1.13 NA NA 0.56 418 3.3% 4% 15% 3% NA NA NA NABahia Sul BSUL5 BZ NR 224.04 NA NA 0.09 722 1.4% 8% 14% 1% NA NA NA NABanksBradesco BBD Outperf. 26.30 25.75 -2% 6.58 3,619 -0.4% 2% 9% 0% 0.88 11.9 10.3 NAItau ITU Buy 48.74 50.00 3% 5.22 11,167 -0.1% -1% 11% 0% 2.80 10.8 9.4 NAUnibanco UBB Outperf. 25.00 25.75 3% 10.90 3,440 0.2% 2% 7% 0% 1.4 9.7 8.7 NABanco do Brasil BBAS3 BZ Hold 8.23 7.64 -7% 1.93 6,026 -0.8% 0% 1% -1% 1.48 7.8 7.3 NAItausa ITSA4 BZ Outperf. 1.21 1.00 -17% 2.76 3,894 2.5% 4% 13% 2% 1.58 6.9 4.7 NAFood RetailersPao de Acucar CBD US Outperf. 25.08 26.00 4% 3.06 2,854 -0.3% 2% 11% 0% 2.2 29.7 24.1 12.3BrewersAmbev ABV US Buy 25.92 27.50 6% 13.75 9,990 1.6% 4% 11% 2% 6.6 19.6 15.0 10.4Average/Total 141,855 NA NA NA NA

* Last price as of 1/4/2004 ** Three-month average daily volume Source: Bloomberg and BBVA Latin America Equities estimates

Price Perf., % change

Refer to important disclosure at the end of this report Page 10

MexicoLast 12 Month Upside Share Market Most EV/ EV/

Bloomberg Price Price Tgt. Potential Volume Cap recent P/E P/E EBITDA EBITDA P/CFCompany Ticker Rating (US$)* (US$) (%) (mn) ** (US$mn) Day Week Month YTD P/BV 03E 04E 03E 04E 03EFood RetailersComerci MCM US Buy 20.50 22.60 10% 0.04 1,113 3.8% 6% 6% 4% 0.98 12.4 10.0 6.6 5.7 6.9Gigante GIGANTE* MM Underp. 0.54 0.60 11% 1.21 535 1.3% 1% 1% 1% 0.47 21.7 16.8 6.3 5.9 6.3Soriana SORIANAB MM Hold 2.22 2.60 17% 0.50 1,336 0.5% 3% 6% 1% 1.00 10.1 8.5 5.4 4.7 7.1Walmex WMMVY US Outperf. 28.65 35.70 25% 1.46 12,783 1.4% 3% 1% 1% 3.52 24.8 21.0 13.3 11.3 18.1BottlersArca ARCA* MM Buy 1.94 2.30 19% 1.43 1,564 1.3% 4% -4% 1% 1.91 16.7 11.9 5.7 4.9 9.3Contal CONTAL* MM Hold 1.73 1.60 -7% 0.48 1,294 1.9% -3% 13% 2% 1.93 13.2 12.6 5.7 5.4 10.2KOF Femsa KOF US Hold 21.03 24.50 17% 3.66 3,882 -1.0% 1% 5% -1% 2.08 14.9 10.3 3.9 3.5 8.6BrewersFemsa FMX US Buy 37.01 43.00 16% 12.25 3,921 0.4% 4% 7% 0% 1.64 12.6 9.2 4.2 3.7 4.8Grupo Modelo GMODELOC MM Hold 2.41 2.90 21% 3.10 7,823 0.1% 2% 0% 0% 2.24 18.4 16.2 6.2 5.7 13.0MediaTelevisa TV US Buy 40.08 48.00 20% 18.73 6,041 0.6% 2% 2% 1% 3.00 21.1 19.9 9.6 9.0 14.6TV Azteca TZA US Buy 9.20 10.40 13% 5.52 1,754 1.1% 3% 9% 1% 3.26 10.0 7.3 7.3 6.4 8.5CementCemex CX US Outperf. 26.45 30.00 13% 26.38 8,039 1.0% 3% 5% 1% 1.34 11.1 9.8 6.3 6.0 5.9Apasco APASCO* MM Hold 8.39 8.69 4% 0.84 1,981 1.7% 2% 8% 2% 1.58 9.8 9.7 4.7 4.6 7.1HousingConsorcio ARA ARA* MM Buy 2.53 3.14 24% 1.55 828 1.6% 4% 1% 2% 2.08 13.8 12.3 7.5 6.6 12.7Corporación GEO GEOB MM Buy 5.18 6.54 26% 1.53 532 1.5% 2% -1% 2% 1.87 11.9 9.3 5.4 4.7 9.6ConstructionICA ICA US Buy 1.52 2.00 32% 0.10 472 7.0% 9% 13% 7% 1.47 16.3 19.3 22.2 11.4 -7.5IndustrialAlfa ALFAA MM Outperf. 3.09 3.56 15% 3.48 1,797 3.0% 4% 0% 3% 0.81 16.3 19.3 5.2 4.6 4.4Desc DESCB MM Underp. 5.31 6.40 21% 0.10 363 -0.7% -2% 0% -1% 0.52 loss 22.1 4.9 5.7 80.5Gcarso GCARSOA1 MM Hold 3.57 4.05 14% 1.11 3,057 1.4% 3% 5% 1% 1.49 20.6 44.0 5.5 5.4 8.7Imsa 1 IMSAUBC MM N.R 2.43 NA NA 0.64 1,368 1.3% 18% 38% 1% 1.11 NA NA NA NA NAVitro VITROA MM Hold 2.90 3.00 3% 0.80 940 0.0% 2% -1% 0% 0.56 loss 22.3 5.7 5.1 5.7BanksGF Banorte GFNORTEO BUY 3.52 4.20 19% 2.39 1,777 1.3% 3% 6% 1% 1.51 9.0 7.9 NA NA 6.2GF Bancomer 1 GFBBB MM NR 0.88 NA NA 10.09 8,138 2.5% 2% 1% 3% 1.54 11.2 9.5 NA NA NATelecomsTel mex TMX Buy 33.11 40.00 21% 64.61 20,343 0.2% 2% 1% 0% 3.35 10.1 9.5 4.6 4.5 5.0America Movil AMX Hold 28.32 27.00 -5% 38.97 18,295 3.6% 5% 5% 4% 2.82 15.4 14.0 7.8 6.5 8.7Average/Total 109,979 2.47 13.9 12.2 7.1 6.4 8.6

* Last price as of 1/4/2004 ** Three-month average daily volume 1. IBES or Nelson's Consensus estimates Source: Bloomberg and BBVA Latin America Equities estimates

Price Perf., % change

Latin America Market Monitor

Refer to important disclosure at the end of this report Page 11

Latin America Market Monitor

ArgentinaLast 12 Month Upside Share Market Most EV/ EV/

Bloomberg Price Price Tgt. Potential Volume Cap recent P/E P/E EBITDA EBITDA P/CFCompany Ticker Rating (US$)* (US$) (%) (mn) ** (US$mn) Day Week Month YTD P/BV 03E 04E 03E 04E 03EAluminiumAluar ALUA AR Buy 1.43 1.73 21% 0.74 1,000 3.6% 13% 32% 3% 1.64 10.4 7.4 5.4 4.4 9.0PetrochemicalSolvay Indupa INDU AR Buy 0.98 1.21 23% 0.46 329 1.1% 12% 18% 1% 1.11 17.2 5.0 4.2 3.4 19.7PetroleumPérez Companc PZE US Outperf. 11.31 10.62 -6% 1.06 2,411 2.9% 12.0% 17% 3% 1.35 10.2 8.2 7.0 5.9 5.9SteelAcindar ACIN AR Outperf. 1.18 1.08 -8% 2.21 329 0.1% 3% -3% 0% 2.06 2.0 2.2 4.2 3.7 1.7Siderar ERAR AR Outperf. 5.33 3.93 -26% 0.34 1,853 1.1% 15% 25% 1% 3.71 15.9 12.5 6.5 5.9 6.5Tenaris TS US Outperf. 34.05 32.20 -5% 2.55 3,952 2.2% 8% 21% 2% 2.19 39.9 30.0 6.8 6.1 61.0TelecomsTelecom TEO US Underperf. 8.88 5.01 -44% 2.77 1,748 1.5% 9% 12% 1% 2.22 4.8 5.8 6.5 4.9 1.3BanksGF Galicia GGAL AR Underperf. 0.72 0.42 -42% 3.22 784 4.4% 11% 11% 4% 1.49 loss 62.4 NA NA NABBVA Frances FRAN AR NR 3.09 NA NA 0.50 1,139 6.9% 3% 24% 7% 1.79 NA NA NA NA NAReal EstateIRSA IRS US Outperf. 9.66 11.32 17% 0.87 205 -3.4% 0% -3% -3% 0.69 8.9 7.3 153.0Avg./Total 13,751 2.09 12.6 11.2 6.5 5.6 26.8

* Last price as of 1/4/2004 ** Three-month average daily volume Source: Bloomberg and BBVA Latin America Equities estimates

Price Perf., % change

Peru & ColombiaLast 12 Month Upside Share Market Most EV/ EV/

Bloomberg Price Price Tgt. Potential Volume Cap recent P/E P/E EBITDA EBITDA P/CFCompany Ticker Rating (US$)* (US$) (%) (mn) ** (US$mn) Day Week Month YTD P/BV 02 03E 02E 03E 02Electric UtilitiesEdegel EDE PE Hold 0.34 0.33 -4% 0.11 717 0.0% 1% 12% 0% 0.90 18.1 21.8 8.2 9.0 11.0Edelnor EDEL/C PE Hold 0.34 0.34 0% 0.14 400 0.0% 0% 6% 0% 1.06 14.0 17.3 6.6 7.5 7.0Luz del Sur LSUR/C PE Hold 1.01 1.35 34% 0.11 491 -0.3% 0% 1% 0% 2.01 10.0 9.8 6.8 7.1 7.4Food & BeveragesBackus I BJ PE Outperf. 0.29 0.38 30% 0.06 456 1.0% 0% 9% 1% 0.86 7.9 7.5 4.6 4.3 5.0Alicorp ALI/C PE NR 0.16 NA NA 0.00 125 0.0% -5% -8% 0% 0.54 31.8 NA 6.5 NA 3.7MiningSouthern C (Cu) PCU/C PE NR 48.65 NA NA 0.31 3903 0.7% 4% 16% 1% NA 64.3 NA 21.9 NA 30.3Minsur I (Sn) MIN PE NR 1.65 NA NA 0.10 982 1.9% 3% 13% 2% NA 6.3 NA 11.5 NA 3.6Buenaventura (Ag, Au) CMB/C PE Buy 28.06 15.59 -44% 0.29 3552 -0.9% 2% -7% -1% 6.77 32.2 24.9 23.3 19.0 13.6ConstructionCementos Lima CL/C PE NR 18.63 NA NA 0.01 759 0.0% 0% -2% 0% NA 29.0 NA 11.7 NA 15.4Cem. Pacasmayo CPAC/C PE NR 0.44 NA NA 0.01 161 0.6% 2% 1% 1% NA 11.2 NA 4.6 NA 6.4BanksCredicorp*** BAP US BUY 13.39 14 5% 0.41 1068 0.3% 5% 9% 0% 1.20 12.8 9.7 5.4 4.4 5.9Bancolombia*** CIB US BUY 5.30 6.7 26% 0.30 764 -0.7% 2% 4% -1% 1.51 5.3 5.1 2.8 1.5 3.5Average/Total 13,378 NA NA NA NA NA NA

* Last price as of 1/4/2004 ** Three-month average daily volume *** Multiples are for 2003 and 04 Source: Bloomberg and BBVA Latin America Equities estimates

Price Perf., % change

Refer to important disclosure at the end of this report Page 12

ChileLast 12 Month Upside Most EV/ EV/

Bloomberg Price Price Tgt. Potential recent P/E P/E EBITDA EBITDA P/CFCompany Ticker Rating (US$)* (US$) (%) D P/BV 03E 04E 03E 04E 03EBanksSantander SAN Outperf. 23.65 27.0 14% 1% 2.77 15.4 11.4 NA NA 9.8BeveragesAndina-A AKO/A Hold 10.65 10.1 -5% 1% 2.86 35.6 27.4 11.2 10.1 16.2CCU CU Hold 21.74 21.0 -3% 1% 3.48 18.7 23.0 11.9 9.7 16.8RetailFalabella FALAB CI Hold 1.78 1.9 9% 1% 0.40 25.4 19.7 19.1 10.9 19.1DYS DYS Hold 21.55 20.3 -6% 4% 4.42 40.5 27.4 17.2 15.1 -220.2Wireless TelecomEntel ENTEL CI Hold 6.12 7.4 21% 1% 1.78 16.5 14.2 5.6 5.1 4.9UtilitiesEndesa EOC Hold 12.08 10.3 -15% 3% 1.55 21.5 20.5 10.6 10.4 7.7Enersis ENI Restricted 7.45 - - 1% 1.26 - - - - -Colbun COLBUN CI Outperf. 0.14 0.2 7% 2% 0.09 27.1 22.6 11.0 10.6 9.4Average/Total 1.91 27.1 22.6 10.1 8.0 -10.1

* Last price as of 1/4/2004 ** Three-month average daily volume Source: Bloomb

Share MarketVolume Cap(mn) ** (US$mn) Day Week Month YT

2.15 4,457 -0.5% 1% 2% -

0.20 1,350 1.4% 4% 11%0.51 1,385 1.1% 1% 0%

1.79 3,500 -0.9% -2% 1% -1.92 1,983 4.3% 10% 15%

1.44 1,446 -0.7% 0% -1% -

0.81 3,303 3.2% 2% 3%5.29 4,530 1.2% 3% 6%2.36 1,360 1.5% 2% 0%

23,313erg and BBVA Latin America Equities estimates

Price Perf., % change

Latin America Market Monitor

Refer to important disclosure at the end of this report Page 13

BBVA ResearchRating System & Price Target Methodology – Ratings are set on a six- and twelve-month basis against the relevant benchmark. There are five recommendations: Buy - Upside potential of more than 15% vs. the market; Outperform - Upside potential of more than 5% vs. the market; Neutral (Hold) - Stock is expected to perform in line with the market (+/-5%); Underperform - Expected downside of at least 5% vs. the market; Sell - Expected downside of at least 15% vs. the market.

The percentage breakdown of ratings in BBVA Latin America Equities’ (BBVA Securities Inc., BBVA Bancomer, BBVA Continental, Banco Frances and BBVA Chile) coverage universe is as follows: Buy (including “Buy” and “Outperform”) - 56%; Neutral (Hold) - 36%; and Sell (including “Sell” and “Underperform”) - 7%. BBVA Latin America Equities has rendered investment banking services or participated as manager and/or co-manager in public offerings in 50% of the “Buy” ratings, 30% of the “Neutral” ratings and in 20% of the “Sell” ratings.

BBVA Securities Inc., BBVA Bancomer’s, BBVA Continental’s , BBVA Brazil’s, BBVA Banco Frances’ and BBVA Chile’s calculation of price targets is based on a combination of one or more methodologies generally accepted among financial analysts, including, but not limited to, analysis of multiples, discounted cash flows, whether in whole or by parts, or any other method which may be applied. The determination of a price target does not imply any warranty that it will be attained, since this depends on other intrinsic and extrinsic factors that affect both the performance of the company and trends in the stock market on which it is based.

Price charts, rating histories and price target revisions for the Latin American companies which are the subject of this report are available.Please call 1-877-747-9725 to have them mailed.

This document, and the information, opinions, estimates and recommendations expressed herein, have been prepared by BBVA Securities Inc., BBVA Bancomer, BBVA Continental, BBVA Brazil, BBVA Banco Frances and BBVA Chile to provide its customers with general information regarding the date of issue of the report and are subject to changes without prior notice. BBVA Securities Inc., BBVA Bancomer, BBVA Continental, BBVA Brazil, BBVA Banco Frances and BBVA Chile are not liable for giving notice of such changes or for updating the contents hereof. This document and its contents do not constitute an offer, invitation or solicitation to purchase or subscribe to any securities or other instruments, or to undertake or divest investments. Neither shall this document nor its contents form the basis of any contract, commitment or decision of any kind.

Investors who have access to this document should be aware that the securities, instruments or investments to which it refers may not be appropriate for them due to their specific investment goals, financial positions or risk profiles, as these have not been taken into account to prepare this report. Therefore, investors should make their own investment decisions considering the said circumstances and obtain such specialized advice as may be necessary.

The contents of this document is based upon information available to the public that has been obtained from sources considered to be reliable. However, such information has not been independently verified by BBVA Securities Inc., BBVA Bancomer, BBVA Continental, BBVA Brazil, BBVA Banco Frances and BBVA Chile and therefore no warranty, either express or implicit, is given regarding its accuracy, integrity or correctness. BBVA Securities Inc., BBVA Bancomer, BBVA Continental, BBVA Brazil, BBVA Banco Frances and BBVA Chile accept no liability of any type for any direct or indirect losses arising from the use of the document or its contents. Investors should note that the past performance of securities or instruments or the historical results of investments do not guarantee future performance. The market prices of securities or instruments or the results of investments could fluctuate against the interests of investors. Investors should be aware that they could even face a loss of their investment.

Transactions in futures, options and securities or high-yield securities can involve high risks and are not appropriate for every investor. Indeed, in the case of some investments, the potential losses may exceed the amount of initial investment and, in such circumstances, investors may be required to pay more money to support those losses. Thus, before undertaking any transaction with these instruments, investors should be aware of their operation, as well as the rights, liabilities and risks implied by the same and the underlying stocks. Investors should also be aware that secondary markets for the said instruments may be limited or even not exist.

BBVA Securities Inc., BBVA Bancomer, BBVA Continental, BBVA Brazil, BBVA Banco Frances, BBVA Chile and/or any of its affiliates, as well as their respective executives and employees, may have a position in any of the securities or instruments referred to, directly or indirectly, in this document, or in any other related thereto; they may trade for their own account or for third-party account in those securities, provide consulting or other services to the issuer of the aforementioned securities or instruments or to companies related thereto or to their shareholders, executives or employees, or may have interests or perform transactions in those securities or instruments or related investments before or after the publication of this report, to the extent permitted by the applicable law.

BBVA Securities Inc.’s, BBVA Bancomer’s, BBVA Continental’s, BBVA Brazil’s, BBVA Banco Frances’ and BBVA Chile’s or any of its affiliates’ salespeople, traders and other professionals may provide oral or written market commentary or trading strategies to its clients that reflect opinions that are contrary to the opinions expressed herein. Furthermore, BBVA Securities Inc.’s, BBVA Bancomer’s, BBVA Continental’s, BBVA Brazil’s, BBVA Banco Frances’ and BBVA Chile’s or any of its affiliates’ proprietary trading and investing businesses, may make investment decisions that are inconsistent with the recommendations expressed herein. No part of this document may be (i) copied, photocopied or duplicated by any other form or means (ii) redistributed or (iii) quoted without the prior written consent of BBVA Securities Inc.’s, BBVA Bancomer, BBVA Continental, BBVA Brazil, BBVA Banco Frances or BBVA Chile. No part of this report may be copied, conveyed, distributed or furnished to any person or entity in any country (or persons or entities in the same) in which its distribution is prohibited by law. Failure to comply with these restrictions may breach the laws of the relevant jurisdiction.

This document is provided in the United Kingdom solely to those persons to whom it may be addressed according to the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001, and it is not to be directly or indirectly delivered to or distributed among any other type of persons or entities. In particular, this document is only aimed at and can be delivered to the following persons or entities: (i) those outside the United Kingdom, (ii) those with expertise regarding investments as mentioned under Section 19(5) of Order 2001, and (iii) high net worth entities and any other person or entity under Section 49(1) of Order 2001 to whom the contents hereof can be legally revealed.

BBVA Securities Inc., BBVA Bancomer, BBVA Continental, BBVA Brazil, BBVA Banco Frances and BBVA Chile are affiliates of Banco Bilbao Vizacaya Agrentaria, S.A. ("BBVA"). BBVA holds, directly or indirectly, at least 1% of the equity capital of the following companies whose shares are open to negotiation in organized markets and which may be the object of analysis in this report herein: Compania Naviera Perez Compac, S.A., FEMSA, Endesa, S.A., CRT Cellular.

In the past twelve months, BBVA Securities Inc., BBVA Bancomer, BBVA Continental, BBVA Brazil, BBVA Banco Frances and BBVA Chile or any of their affiliates have participated as manager or co-manager in public offerings, and received compensation for these services of the following companies, which may be the object of analysis of this report: America Movil, Cemex, Endesa, Grupo Carso, Grupo IMSA, Telecom and Telmex.

In the past twelve months, BBVA Securities Inc., BBVA Bancomer, BBVA Continental, BBVA Brazil, BBVA Banco Frances and BBVA Chile or any of their affiliates have received compensation for investment banking services from the following companies, which may be the object of analysis of this report: DESC, Endesa, KOF FEMSA, Siderca, Telecom, Telefonica and Tenaris, S.A.

In the next three months, BBVA Securities Inc., BBVA Bancomer, BBVA Continental, BBVA Brazil, BBVA Banco Frances and BBVA Chile or any of their affiliates expects to receive, or intends to seek, compensation for investment banking services from the companies which are the object of analysis of this report. The remuneration system concerning the analyst/s, author/s of this report is based on multiple criteria, including the results obtained by BBVA Securities Inc., BBVA Bancomer, BBVA Continental, BBVA Brazil, BBVA Banco Frances and BBVA Chile and by BBVA Group in the fiscal year, which, in turn, include the

BBVA Researchresults generated by the investment banking business; nevertheless, they do not receive any remuneration based on revenues from any specific transaction in investment banking.

BBVA Securities Inc. is a member of the NASD and SIPC. BBVA Bancomer, BBVA Continental, BBVA Brazil, BBVA Banco Frances and BBVA Chile and all other entities in the BBVA Group which are not members of the New York Stock Exchange or the National Association of Securities Dealers, Inc., are not subject to rules of disclosure affecting such members.

Any US recipient of this report (other than a US registered broker/dealer) that would like to effect any transactions in any security discussed in this report should contact and place orders with the company distributing the report, BBVA Securities Inc., at (212) 728-2400. BBVA Securities Inc. accepts responsibility (solely for purposes of and within the scope of SEC Rule 15a-6 under the U.S. Securities and Exchange Act of 1934) for this report and its dissemination in the United States.

Gustavo Teran and/or his household members own stocks in Cemex, which may be the object of analysis of this report.

Gustavo Neffa and/or his household members own stock in Tenaris which may be the object of analysis of this report.

I, Amalia Estenssoro,hereby certify that the views expressed in this research report accurately reflect my personal views about the subject company(ies)and its (their) securities. I also certify that I have not been, am not, and will not be receiving direct and/or indirect compensation in exchange for any specific recommendation in this report.

BBVA

BBVA Securities, Inc. th 1345 Ave of the Americas, 45 Floor, New York, NY 10105, U.S.

Tel 1-212-728 2300, Fax 1-212-262 5870/71 Member of the NASD and SIPC

BBVA Bolsa

Via de los Poblados s/n, Edificio Argentaria, Planta 3, 28033 Madrid, Spain Tel 34-91-374-5350, Fax 34-91-374-7825

Juan Carlos Mateos, CFA 52-55-5201-2803 jcmateos@bbva.bancomer.com Head of Latin America Research

Economics Amalia Estenssoro 1-212-728-2340 amalia.estenssoro@bbvany.com Economist Juan Pablo Chavez 1-212-728-2342 juanpablo.chavez@bbvany.com Local Markets Strategist

Regional Sector Coverage

Jeffrey Noble 55-11-3707-4930 jeffrey.noble@grupobbva.com Telecoms, Director of Brazil Research Gustavo Teran, CFA 52-55-5201-2659 gustavo.teran@bbva.bancomer.com Banks, Director of Mexico Research

Production Thomas R. Koveleskie 1-212-728-2439 thomas.koveleskie@bbvany.com Product Manager, Head of Latin America Production Michael Lazar 1-212-728-2417 michael.lazar@bbvany.com Editor

Equity Sales New York

Jose Manuel Garcia 1-212-728-2400 jmanuel.garcia@bbvany.com Todd Edwards 1-212-728-2400 todd.edwards@bbvany.com

Madrid

Guillermo Serrano 34-91-374-5343 guillermo.serrano@grupobbva.com Victoria Mas 34-91-374-5342 victoria.mas@grupobbva.com

Mexico City

Ramon Wallace Ruiz 52-55-5201-2905 ramon.ruiz@bbva.bancomer.com Equity Trading & Sales Trading Trading - New York Sales Trading - New York Paul Wolfrom 1-212-728-2430 paul.wolfrom@bbvany.com David Crummy 1-212-728-2400 david.crummy@bbvany.com Ryan Gray 1-212-728-2430 ryan.gray@bbvany.com Darrin Cummings 1-212-728-2400 darrin.cummings@bbvany.com

Francés Valores Sociedad de Bolsa SA Reconquista 281, Buenos Aires (1003), Argentina / Tel: 54-11-4341-6504, Fax: 54-11-4341-6506

Alejandro Castresana 54-11-4341-6505 acastresana@bancofrances.com.ar Head of Research Gustavo Neffa 54-11-4346-4000 ext 36537 gustavo.neffa@bancofrances.com.ar Analyst

BBVA Escritório de Representacão no Brasil Rua Campos Bicudo, 98, 16 andar, Jardim Europa, São Paulo, SP, CEP 04536-010, Brazil / Tel: 55 11 3707 4930, Fax: 55 11 3707 4903

Jeffrey Noble 55-11-3707-4930 jeffrey.noble@grupobbva.com Head of Research, Latin America Telecoms

BBVA Corredores de Bolsa BHIF Pedro de Valdivia 100, Piso 7, Santiago, Chile / Tel: 56-2-679-2750, Fax: 56-2-696-3034

Mariela Iturriaga 56-2-679-1127 miturriaga@bbva.cl Head of Research, Banks, Electric Utilities, Telecoms Juan Carlos Tali 56-2-679-1126 jtalib@bbva.cl Retail, Beverages

BBVA Valores Ganadero S.A. Carrera 7, No 71, 52 Torre A, Piso 11, Santafe de Bogota, Colombia / Tel: 57-1-313-2176, Fax: 57-1-313-1483

Mario Escobar 571-313-22-06 mario.Escobar@bbvaganadero.com Analyst

BBVA Bancomer Montes Urales 620, 1er Piso, Lomas de Chapultepec, Mexico DF 11000, Mexico / Tel 52-55-5201-2900, Fax: 52-55-5201-2910

Juan Carlos Mateos, CFA 52-55-5201-2803 jcmateos@bbva.bancomer.com Head of Latin America Research, Conglomerates Gustavo Teran, CFA 52-55-5201-2659 gustavo.teran@bbva.bancomer.com Head of Research, Latin America Banks Carlos Perezalonso Eguía 52-55-5201-2925 ca.perezalonso@bbva.bancomer.com Media, Cement, Housing Jose Alberto Galvan 52-55-5201-2908 j.galvan@bbva.bancomer.com Retail, Food, Beverages Rodrigo Jiménez 52-55-5201-2662 r.jimenez@bbva.bancomer.com Mining, Restaurants

BBVA Continental SAB Avda. Republica de Panama 3055, Piso2, CC San Isidro, Lima 27, Peru / Tel 51-1-211-2395, Fax 51-1-211-2440

Rossana de la Quintana 55-1-211-1698 rdelaquintana@continental.grupo.bbva.com Mining & Construction

BBVA Provincial Casa de Bolsa

Centro Financiero Provincial, Piso 14, San Bernardino, Caracas, Venezuela 1010 / Tel 58-212-504-5911, Fax 58-212-504-5378

Vincenzo Giusti 58-212-504-4055 vincenzo_giusti@provincial.com Analyst