January 8, 2019 / 10:08 PM / 5 months ago

EMERGING MARKETS-Mexico stocks jump on IPO tax cut incentive; Latam FX gains

 (Adds market details)
    By Agamoni Ghosh
    Jan 8 (Reuters) - Latin American stocks broadly rose on
Tuesday, with Mexico's benchmark index hitting a near two-month
high on news of expected tax cuts for companies taking the IPO
route, as global equities gained on optimism over U.S.-China
trade talks. 
    The dollar rebounded from Monday's near three-month low,
mainly at the euro's expense, pressuring many emerging
currencies, but a lift in oil prices helped currencies of net
exporters in Latin America.
    MSCI's index for Latin American stocks
hovered around two-month highs, pushed up by a 1.6 percent rise
in Mexico's IPC index after President Andres Manuel Lopez
Obrador's leftist government said it would seek to boost initial
public offerings by giving tax cuts to owners of companies that
list.
    Investors saw the move as a positive step after being shaken
last year over worries about policymaking under the new
administration, particularly the scrapping of an airport project
that Lopez Obrador said was tainted by corruption.  
    In these first days of the new year, sentiment is more
confident, said Gerardo Sienra, head of equity sales at Mexican
brokerage Intercam. But he cautioned that on any given day the
rules could change.
    Brazil's Bovespa index closed above 92,000 points
for the first time ever after hitting several record highs last
week. 
    BRF <BRFS3.SA > was the highest gainer on the index with
traders citing the positive outlook for the U.S.-China trade
talks, which could bring relief to commodity prices such as
soybeans, benefiting the food maker. 
    Brazilian airline Gol Linhas Aereas Inteligentes
was the top loser, with its preferred shares closing down 1.3
percent after it released preliminary fourth-quarter results.

    Indexes in Colombia and Chile also rose, but Buenos Aires'
Merval Index fell 0.3 percent, led by declines in bank
shares.
    Currencies in the region outperformed their emerging market
peers with the Colombian peso leading gains after oil
prices rose more than 2 percent on the trade talk optimism.

    "The difference in the EM currencies today would be mainly
because of the movement of oil with the Colombian peso emerging
as one of the better performers," said Christian Lawrence,
senior market strategist, LatAm FX, Rabobank.
    Brazil's real and Chile's peso gained, but
Argentina's peso fell 0.7 percent in response to a drop
in the rate paid by the central bank in a bidding for Liquidity
Letters "Leliq."
    Latin American stock indexes and currencies at 2200 GMT
    
 Stock indexes                             daily %
                               Latest       change
 MSCI Emerging Markets            975.51     -0.25
                                          
 MSCI LatAm                      2768.16      0.71
                                          
 Brazil Bovespa                 92031.86      0.36
                                          
 Mexico IPC                     43542.87      1.65
                                          
 Chile IPSA                      5224.28      0.66
                                          
 Argentina MerVal               32914.88     -0.29
                                          
 Colombia IGBC                  11501.84      0.85
                                          
                                                  
 Currencies                                daily %
                                            change
                                  Latest  
 Brazil real                      3.7132      0.61
                                          
 Mexico peso                     19.3710      0.05
                                          
 Chile peso                          680      0.14
                                          
 Colombia peso                   3148.95      0.99
 Peru sol                           3.34      0.36
                                          
 Argentina peso (interbank)      37.5400     -0.59
                                          
 
    
    

 (Reporting by Agamoni Ghosh in Bengaluru; Additional reporting
by Stefanie Eschenbacher and Michael O'Boyle in Mexico City;
Editing by Leslie Adler)
  
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