EMERGING MARKETS-Brazil stocks, currency jump on PMDB defection prospects

lunes 28 de marzo de 2016 11:28 GYT

By Bruno Federowski
    SAO PAULO, March 28 (Reuters) - Brazil's stocks and currency
rose on Monday on prospects that  the biggest party in the
government coalition was about to defect, weakening President
Dilma Rousseff's defense against impeachment proceedings in
    The Brazilian Democratic Movement Party (PMDB), Brazil's
largest political party, appears poised to decide on Tuesday to
withdraw its support from Rousseff's administration.
    Rousseff's impeachment, if it materializes, would put the
government in the hands of Vice President Michel Temer, leader
of the PMDB, who is reported to be working on policies including
sweeping welfare cuts if he comes to power. 
    "The market sees the PMDB's defection as the beginning of
the end for Rousseff's government," said Jose Carlos Amado, a
trader with the Spinelli brokerage in Sao Paulo.
    Brazil's stocks and currency have rallied as expectations of
Rousseff's ouster grew, driving the central bank to act to
weaken the real. Many blame the leftist president's economic
interventions for pushing Brazil into a deep economic crisis.
    On Monday, shares of state-controlled companies such as
Petroleo Brasileiro SA and Banco do Brasil SA
 were among the biggest gainers on Brazil's benchmark
stock index.
    Shares of Companhia de Saneamento Basico do Estado de Sao
Paulo jumped almost 3 percent after the state water
utility reported an almost fifteen-fold increase in net profit
in the fourth quarter.
    The company asked regulators to end discounts to customers
who cut their water use amid Brazil's worst draught in decades.
    Trading volumes were thin in most Latin American markets
after an extended weekend due to Easter holidays.

    Key Latin American stock indexes and currencies at 1505 GMT:
 Stock indexes                               daily %    YTD %
                                              change   change
 MSCI Emerging Markets               813.19     0.11     2.29
 MSCI LatAm                         2121.81     1.98     13.7
 Brazil Bovespa                    50543.99     1.79    16.60
 Mexico IPC                        45688.94     0.09     6.31
 Chile IPSA                         3890.46     0.14     5.71
 Chile IGPA                        19076.20     0.11     5.09
 Argentina MerVal                  12688.67     1.51     8.68
 Colombia IGBC                      9657.06    -1.04    12.98
 Venezuela IBC                     14869.75    -0.59     1.93
 Currencies                                  daily %    YTD %
                                              change   change
 Brazil real                         3.6426     0.91     8.36
 Mexico peso                        17.4900     0.34    -1.49
 Chile peso                           680.4     0.04     4.31
 Colombia peso                         3055     0.56     3.74
 Peru sol                            3.3401     1.14     2.21
 Argentina peso (interbank)         14.5800    -0.21   -10.96
 Argentina peso (parallel)            15.26     0.26    -6.49

 (Additional reporting by Priscila Jordão Editing by W Simon)