February 18, 2019 / 10:07 PM / a month ago

EMERGING MARKETS-Latam assets slip, Brazilian minister's firing hits risk appetite

 (Recasts throughout; updates prices, adds economist's quote)
    By Aaron Saldanha
    Feb 18 (Reuters) - Most Latin American stock markets dropped
on Monday, with  stocks in Brazil leading the losses on
uncertainty fed by a brewing political scandal, while Latin
American currencies broadly softened against the dollar in trade
thinned by a U.S. market holiday.
    Brazilian President Jair Bolsonaro fired Secretary General
Gustavo Bebianno due to accusations of misusing campaign funds
for congressional candidates in last year's election and
replaced him with General Floriano Peixoto.

    Investors fear a developing scandal could strain 
Bolsonaro's coalition in Congress, where his pension reform
proposal is to be addressed on Wednesday. Reform to the
country's pension system is seen as crucial to Latin America's
top economy.        
    "This political issue with Bebianno is quite negative, and
could play a negative role for the discussions in Congress,"
said Patricia Krause, economist at Coface in Sao Paulo, when
Vice President Hamilton Mourao told reporters of the sacking.
    Bebianno, acting president of the Social Liberal Party last
year and a key aide to right-wing politician Bolsonaro, denies
any wrongdoing.
    MSCI's index of Latin American stocks shed 1
percent, while its index of Latin American currencies
 dipped 0.2 percent.
    Brazil's stocks benchmark dropped 1 percent, with
losses clocked across the board, in its worst performance in
more than a week and a half.    
    Mining giant Vale SA slid 1.4 percent. Brazil's
government banned new upstream mining dams, ordering the
decommissioning of all such dams by 2021, targeting the type of
structure that fatally burst at a Vale-run dam last month.
 
    An uptick in oil prices did little for state-run oil
firm Petroleo Brasileiro SA. Its common stock and
preferred shares fell 1.2 percent and 0.3 percent,
respectively.
    Petrobras Distribuidora was the top loser on the
main index, clocking a 3.5 percent loss.  
    The firm announced the resignation of the director of
corporate markets and lubricants, without naming a replacement
immediately, a factor which led analysts at Itau BBA to perceive
the development negatively.
    Brazil's real weakened 0.9 percent while yields on
local 10-year bonds rose to 8.91 percent.
    Mexican stocks were little changed, as was the
country's peso.
    Chilean stocks slid 0.6 percent, while the
local peso rose 0.2 percent, helped by a rise in the
price of copper - Chile's top export - on concerns of
tightening supply of the metal.        
    Argentina's stocks benchmark dipped 0.3 percent and
the country's peso softened in low liquidity as the U.S.
financial holiday meant institutional market participants were
generally absent from the market.
    Colombian stocks slid 0.3 percent, while the
country's peso was little changed. 
    
    Key Latin American stock indexes and currencies at 2135 GMT

    
 Stock indexes                           daily %
                             Latest       change
 MSCI Emerging Markets         1036.73      0.59
                                        
 MSCI LatAm                    2853.27     -1.02
                                        
 Brazil Bovespa               96509.89     -1.04
                                        
 Mexico IPC                   42981.31     -0.02
                                        
 Chile IPSA                    5370.29     -0.55
                                        
 Argentina MerVal             37355.24     -0.31
                                        
 Colombia IGBC                12063.81     -0.29
                                        
                                                
 Currencies                              daily %
                                          change
                                Latest  
 Brazil real                    3.7351     -0.13
                                        
 Mexico peso                   19.2446     -0.05
                                        
 Chile peso                      660.4      0.21
                                        
 Colombia peso                  3131.5      0.00
 Peru sol                        3.319      0.21
                                        
 Argentina peso                38.6500     -0.03
 (interbank)                            
                                        
 
 (Reporting by Aaron Saldanha in Bengaluru and Jamie McGeever
and Ricardo Brito in Brasilia; Editing by Dan Grebler)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below