EMERGING MARKETS-Venezuela bond prices at all-time low; Petrobras slumps
By Walter Brandimarte RIO DE JANEIRO, Dec 9 (Reuters) - Venezuelan bond prices hit all-time lows on Tuesday as slumping crude prices fanned concerns about the oil-exporting country's ability to honor its sovereign debt obligations. Most Latin American stock markets were hit by concerns about lower commodity prices and China's slowing economy, with shares of miners and oil companies among the biggest decliners. Mexico's IPC stock index was off 1.27 percent. Brazil's benchmark Bovespa index was on track to close below the 50,000 points threshold for the first time since March as shares of state-run oil company Petroleo Brasileiro SA dove more than 4 percent to a nine-year low. Petrobras, as the oil company is known, has been under increased pressure from a growing corruption scandal that has forced it to delay the release of its third-quarter earnings. Late on Thursday, investors filed a class-action lawsuit against the company in a U.S. court, arguing the value of its assets was inflated under the corruption scheme. Lower oil prices have recently contributed to doubts about the viability of some of Petrobras' exploration projects. Oil prices rebounded on Tuesday after five consecutive sessions of losses but still remained near five-year lows, with traders wary of more losses in the near term. The recent oil slide has been the last straw in Venezuela's growing economic crisis, which has already caused the local currency to lose nearly 40 percent of its value in the parallel market during the past three months. "The recent fall in oil prices appears to have accelerated what had already started to look like a currency crisis" in Venezuela, David Rees, emerging markets economist with London-based Capital Economics, wrote in a research note. "A default on foreign currency debt is a key risk in the next two years," Rees added. The cost of insuring against a Venezuelan debt default jumped to an all-time high, with five-year credit default swaps trading near 3,300 basis points. Venezuela's benchmark global bond due in 2027 plunged more than $2 in price to $48.646, driving its yield to an all-time high of 20.887 percent. Key Latin American stock indexes and currencies at 1755 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 965.28 -1.18 -2.58 MSCI LatAm 2,771.98 -0.9 -12.61 Brazil Bovespa 49,981.71 -0.58 -2.96 Mexico IPC 42,397.65 -1.27 -0.77 Chile IPSA 3,914.64 -1.35 5.82 Chile IGPA 19,149.92 -1.07 5.06 Argentina MerVal 8,901.17 -7.09 65.11 Colombia IGBC 11,641.72 -0.9 -10.94 Peru IGRA 14,881.56 0.9 -5.54 Venezuela IBC 3,196.63 4.31 16.81 Currencies Latest Daily YTD pct pct change change Brazil real 2.5949 0.58 -9.18 Mexico peso 14.3844 -0.03 -9.42 Chile peso 613.75 -0.33 -14.28 Colombia peso 2,344.6 -1.20 -17.60 Peru sol 2.964 -0.27 -5.77 Argentina peso 8.5500 0.00 -24.06 (interbank) Argentina peso 12.72 0.47 -21.38 (parallel) (Reporting by Walter Brandimarte, editing by G Crosse)
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