April 5, 2019 / 9:50 PM / 16 days ago

EMERGING MARKETS-Latam stocks end week strongly on gains in Brazil, Mexico

 (Recasts throughout, updates prices, adds strategist's quote)
    By Aaron Saldanha
    April 5 (Reuters) - An index of Latin American stocks rose
to a more than two week closing peak on Friday, helped by solid
gains in index heavyweights Brazil and Mexico, with broad risk
sentiment buoyed by hopes of smoother U.S.-China trade.
    Brazilian Finance Minister Paulo Guedes said commitment to
reforming the country's pension system across the political
spectrum was solid, presenting an image of unity with some of
the key congressional figures whose support he needs to pass the
proposal.
    Investors see an overhaul of the country's massive pension
system as a key measure in bolstering Latin America's top
economy, though the government is still some way short in
building the political consensus required to approve the
proposal. 
    "We were relatively busy for a Friday today," said Roger K.
Horn, senior EM strategist at SMBC Nikko Securities America,
adding the government's pension reform proposal "seemed to get a
little more support today from leaders of Congress."
    MSCI's index of Latin American stocks rose
1.3 percent, to post a weekly gain of 3.2 percent.
    Sao Paulo-traded stocks rose 0.8 percent, aided by
strength across most sectors.
    State-run oil firm Petroleo Brasileiro SA (Petrobras) saw
its common shares and preferred shares
rise 2.2 percent and 1.1 percent, respectively. 
    Along with higher oil prices, Petrobras shares were
boosted by the news of its biggest ever divestment, with an
Engie-led consortium offering $8.6 billion for 90
percent of gas pipeline unit TAG.
    Mexican stocks tacked on 2.4 percent on Friday, to
finish the week 3.9 percent higher.    
    Shares of America Movil SAB de CV surged 4.2
percent. JP Morgan upgraded the telecom firm's U.S.-listed stock
 to an "Overweight" rating and raised its price target to
$17 from $16. 
    The Mexican peso, one of the developing world's most
liquid currencies, firmed 0.4 percent. 
    The spread, or surplus yield, of local 10-year Mexican bonds
 over their U.S. peers saw its lowest
level in about a week and a half, at just under 546 basis
points.
    Argentina's stocks benchmark rose 1.6 percent, as it
continued its recovery from Wednesday's 3.8 percent slide. 
    The country's peso softened to a record closing low.
The central bank cut the interest rate payable on short-term
"Leliq" notes. 
    "Argentina was under pressure again with most bonds closing
near the lows of the day," said SMBC Nikko's Horn.
    Colombia's peso firmed 0.2 percent, benefiting from a
1.4 percent rise in oil prices, while local stocks
tacked on half a percent. 
    The optimism broadly seen across the region did not support 
Chilean stocks, which fell half a percent. 
    Chile's peso softened a touch, with a decline in the
price of copper, the country's top export, in the
backdrop.           

    Key Latin American stock indexes and currencies at 2056 GMT
    
 Stock indexes                        Latest          Daily
                                                        pct
                                                     change
 MSCI Emerging Markets                   1,085.14      0.41
 MSCI LatAm                              2,833.66       1.3
 Brazil Bovespa                         97,108.17      0.83
 Mexico IPC                             44,989.86       2.4
 Chile IPSA                              5,254.94     -0.54
 Argentina MerVal                       32,666.88      1.63
 Colombia IGBC                          13,110.93      0.54
                                                           
 Currencies                                Latest     Daily
                                                        pct
                                                     change
 Brazil real                               3.8736     -0.07
 Mexico peso                              19.0678      0.41
 Chile peso                                 664.5      0.15
 Colombia peso                           3,122.48      0.17
 Peru sol                                   3.294      0.06
 Argentina peso (interbank)               43.9100     -1.12
                                                   
 

 (Reporting by Aaron Saldanha in Bengaluru; editing by Chris
Reese)
  
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