March 23, 2017 / 4:09 PM / 2 years ago

EMERGING MARKETS-Brazil real slips on narrow win for outsourcing bill

    By Bruno Federowski
    SAO PAULO, March 23 (Reuters) - The Brazilian real weakened
on Thursday after the country's lower house of Congress approved
a government-sponsored bill by a narrower margin than expected,
raising concerns of fading support for a planned pension reform.
    The bill, which allows companies to outsource any job and
drew fierce opposition from labor unions, was approved 231-188.
President Michel Temer's government says it will create new jobs
and help pull Brazil out of a two-year recession.
    The real slipped 1.4 percent as traders worried that
could force Temer to further dilute plans to revamp the
country's costly pension system in order to guarantee approval.
    Temer announced on Tuesday that the proposal would only
apply to federal employees, without changing pension systems
managed by state governments or large cities.
    Most other Latin American currencies were flat as investors
waited to see whether U.S. President Donald Trump could push
through a healthcare bill to replace Obamacare, paving the way
for an effort to cut taxes.
    Emerging assets have rallied hard this year on the back of
Trump's promises to cut taxes and regulations and to revitalize
crumbling infrastructure. But they stumbled on Wednesday after
the healthcare bill stalled in Congress, raising doubts about
his ability to implement his pledges.
    Brazil's benchmark Bovespa stock index seesawed,
with shares of power utility Cia Energética de Minas Gerais SA
 among the biggest gainers.
    Traders booked profits on the stock following a three-day
slump triggered by concerns that it could lose the operating
licenses to several power dams.
    Reuters reported on Thursday that Cemig, as the company is
known, plans to sell a bigger stake than initially planned in
subsidiary Light Energia SA, according to a person
with direct knowledge of the plan.
    Key Latin American stock indexes and currencies at 1540 GMT:
 Stock indexes                            daily %    YTD %
                                 Latest    change   change
 MSCI Emerging Markets            968.01     0.11    12.14
 MSCI LatAm                      2584.43     -0.8     11.3
 Brazil Bovespa                 63413.15    -0.17     5.29
 Mexico IPC                     48741.43     0.52     6.79
 Chile IPSA                      4706.79     0.36    13.38
 Chile IGPA                     23564.61     0.33    13.65
 Argentina MerVal               19767.30     0.51    16.84
 Colombia IGBC                  10071.13     0.19    -0.56
 Venezuela IBC                  37377.17     1.05    17.89
 Currencies                               daily %    YTD %
                                           change   change
 Brazil real                      3.1376    -1.35     3.56
 Mexico peso                     19.0330    -0.09     8.99
 Chile peso                        663.8    -0.17     1.04
 Colombia peso                    2918.6    -0.10     2.84
 Peru sol                          3.243     0.03     5.27
 Argentina peso (interbank)      15.6150     0.03     1.67
 Argentina peso (parallel)         16.03     0.31     4.93
 (Reporting by Bruno Federowski; Editing by Jonathan Oatis)
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