EMERGING MARKETS-Brazil stocks fall after Oi files for bankruptcy protection
By Bruno Federowski and Priscila Jordão SAO PAULO, June 21 (Reuters) - Brazilian stocks fell on Tuesday after Oi SA filed for Brazil's largest ever bankruptcy protection, weighing on banks that lent money to the country's No. 1 fixed-line phone carrier. Preferred shares of Oi SA, which are not part of Brazil's benchmark Bovespa stock index, plunged as much as 31 percent to a fresh record low. Common shares dropped over 20 percent. The company petitioned late on Monday to seek protection from creditors on 65.4 billion reais ($19.2 billion) in liabilities after failing to reorganize operations amid a deep recession. The move could force lenders to raise loan-loss provisions sharply while also setting a dangerous precedent for indebted companies, Credit Suisse analysts wrote in a client note. Shares of Itaú Unibanco SA dropped 2.3 percent, scraping the most points off the benchmark index. Shares of state-controlled Banco do Brasil SA, which Credit Suisse said might have the largest exposure to Oi, fell 4.7 percent. Traders said outflows stemming from the slump in Oi shares weighed on the country's real currency, which was nearly flat in early afternoon trading. Shares of Oi competitors TIM Participações SA and Telefônica Brasil SA rose 1.2 percent and 0.1 percent, respectively. Kroton SA rose 1.4 percent after Brazil's largest for-profit education firm sweetened the terms of an unsolicited bid for Estácio Participações SA in an effort to fight off a rival offer. Estácio shares fell 0.3 percent. Estácio's No 2 shareholder, the Zaher family, plans to vote against Kroton's bid, a source with knowledge of the matter told Reuters on Tuesday. Other Latin American currencies inched up on optimism about a possible British vote for remaining in the European Union. Recent polls have generally shown a small lead for the "Remain" vote in Thursday's referendum. Key Latin American stock indexes and currencies at 1515 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 824.74 0.43 3.4 MSCI LatAm 2146.19 -0.5 17.88 Brazil Bovespa 50100.58 -0.45 15.57 Mexico IPC 45659.38 -0.26 6.24 Chile IPSA 3971.96 -0.23 7.93 Chile IGPA 19629.79 -0.2 8.14 Argentina MerVal 13532.34 3.51 15.91 Colombia IGBC 9820.57 -0.14 14.90 Venezuela IBC 14075.98 -0.22 -3.51 Currencies daily % YTD % change change Latest Brazil real 3.3950 0.11 16.26 Mexico peso 18.6360 0.09 -7.54 Chile peso 675.7 0.34 5.03 Colombia peso 2971.5 0.06 6.66 Peru sol 3.2839 0.12 3.96 Argentina peso (interbank) 13.8675 0.38 -6.38 Argentina peso (parallel) 14.38 0.28 -0.76 (Reporting by Bruno Federowski and Priscila Jordão; Additional reporting by Guillermo Parra-Bernal; Writing by Bruno Federowski; Editing by Chris Reese)
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