NEW YORK (
) -- The impact of Venezuelan president Hugo Chavez's decision to sharply devaluate the country's currency can already be seen in the share prices of consumer good bellwethers such as
Procter & Gamble
On Friday, Chavez cut the Venzuelan Bolivar to 2.6 per U.S. dollar from 2.15 per U.S. dollar for essential imports like food and medicine and set the rate at 4.3 bolivars per dollar for most imports or nonessential items.
Chavez signed off on the massive devaluation to address the intense financial pressure his government has been facing since the price of oil, one of its main exports, tumbled amid the global financial crisis.
Upon the news of the Venezuelan currency devaluation, BMO Capital Markets immediately cut its rating of Procter & Gamble to market perform from outperform on Monday, according to
P&G stock has tumbled by 1.1% to $59.80 in morning trading.
Venezuela's devaluation is "important on the headline for many of the multinationals," Stifel Nicolaus managing director of equity trading David Lutz, told
. "Bottom line, the market hates uncertainty."
Colgate-Palmolive, which expects its productions to fall under the nonessential import category, could take charges throughout 2010 following the devaluation -- but that shouldn't affect its financial position, according to
The wire report says that Colgate estimates the charges would fall in the range of 4 cents to 6 cents per share during each quarter of 2010.
About 6% of Colgate's sales come from Venezuela, according to the wire report, citing BMO analyst Connie Maneaty.
Colgate shares have fallen by 1.6% to $80.20.
Other consumer goods giants are trading in mixed territory.
is at $60.70, down 1.2%.
Johnson & Johnson
has inched up by 0.1% to 64.30.
-- Reported by Andrea Tse in New York
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