January 11, 2019 / 3:26 PM / 12 days ago

EMERGING MARKETS-Latam stocks, FX take a breather, Chile stands out from the crowd

    By Aaron Saldanha
    Jan 11 (Reuters) - Latin America stocks eased on Friday,
following U.S. equities lower, but remained on track for a third
straight weekly rise while Latin American currencies lost
ground. 
    Major U.S. indexes were down about 0.5 percent, though the
world index added 0.3 percent. 
    Markets in Latin America and beyond have been lifted this
week as U.S. Federal Reserve officials promised patience when it
comes to raising U.S. borrowing costs. Also helpful was U.S.
officials saying they expect China's top trade negotiator may
visit Washington this month, signaling possible higher-level
discussions.     
    Brazil's Bovespa stocks benchmark was down 0.4
percent, mainly on weakness among energy and financial firms,
but was still near an all-time closing high clocked on Thursday.
    Credit Suisse research analysts Alexander Redman and Arun
Sai on Friday questioned whether equity investors in Latin
America's top economy have "priced in too much good news too
quickly," given the market's inferior return on equity and the
higher cost of equity. 
    The Bovespa is up about 6.7 percent this year and has had
its best January to date since 2009.  
    State-run oil firm Petroleo Brasileiro SA's
(Petrobras)common and preferred shares
each dropped over 1.2 percent on Friday as oil prices
fell.
    Adding to weakness in Petrobras shares, the firm's new chief
executive is reportedly pushing for the ouster of two board
members. Such an abrupt turnover for theoretically independent
board members underscores long-standing corporate governance
questions for Petrobras, which past governments have often used
as a blunt tool for economic policy.
    Brazil's real was 0.1 percent softer, a move exceeded
in magnitude by Colombia's peso, which fell 0.7 percent
amid lower oil prices.
    The Argentine stocks benchmark was 0.4 percent lower
while the peso gave back some gains recorded over the
past two sessions. Traders expect the central bank to continue
buying U.S. dollars at current levels, as it did on Thursday
when the USD-ARS pairing broke through the floor of the currency
band.
    The Mexican peso was little changed, as were local
stocks.
    In Chile, the stocks benchmark was up 0.5
percent and a firmer Chilean peso was underpinned by an
uptick in the price of key export copper.
    An ETF tracking the J.P. Morgan EMBI Global Core Index
 is off to its best yearly start in over a decade, up
about 1.54 percent through Thursday.
    
    Key Latin American stock indexes and currencies at 1509 GMT
   
 Stock indexes                           daily %
                             Latest       change
 MSCI Emerging Markets          999.92      0.13
                                        
 MSCI LatAm                    2808.70     -0.86
                                        
 Brazil Bovespa               93419.06     -0.41
                                        
 Mexico IPC                   43659.71     -0.02
                                        
 Chile IPSA                    5321.90      0.45
                                        
 Argentina MerVal             34043.08     -0.36
                                        
 Colombia IGBC                11601.40     -0.23
                                        
                                                
 Currencies                              daily %
                                          change
                                Latest  
 Brazil real                    3.7151     -0.19
                                        
 Mexico peso                   19.1452     -0.12
                                        
 Chile peso                      674.8      0.06
                                        
 Colombia peso                 3158.57     -0.73
 Peru sol                        3.338      0.09
                                        
 Argentina peso                37.1800     -0.22
 (interbank)                            
                                        
 
 (Reporting by Aaron Saldanha in Bengaluru; Editing by Jeffrey
Benkoe)
  
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