November 22, 2018 / 10:02 PM / 23 days ago

EMERGING MARKETS-Latam stocks, currencies slip as weakness in Mexico weighs

 (Rewrites, updates prices, adds quote)
    By Aaron Saldanha
    Nov 22 (Reuters) - Latin American stocks and currencies fell
on Thursday, hurt by losses in Mexico under continued pressure
from a lawmaker's mining bill, with movements amplified by thin
volumes on account of the U.S. holiday of Thanksgiving.
    MSCI's index of Latin America stocks slid
half a percent while its currencies index for the region
 fell 0.3 percent, down for a third straight day.
 
    Mexican stocks declined 0.6 percent. A lawmaker
presented a bill on Tuesday that would require the consent of
indigenous communities before granting mining concessions on
their land.
    Shares of mining firms tumbled with Industrias Penoles
 and Grupo Mexico clocked more than
two-year closing lows, tumbling 3.1 percent and 4.6 percent,
respectively. Morgan Stanley downgraded the stocks citing the
bill.
    The mining proposal is the latest blow to investor
sentiment, which has taken a beating in recent weeks - first
from the scrapping of an already started airport project by the
incoming administration and then by a senator's proposal to cap
or eliminate some banking commissions.
    Sentiment is cautious towards the country, with the incoming
administration having scheduled a public consultation over this
weekend to vote on matters including a new refinery.

    The consultation comes despite the International Monetary
Fund calling for state oil firm Pemex to be on a firmer
financial footing before new refinery investments are made.

    Mexico's peso softened 0.3 percent to give back a
chunk of Wednesday's 0.6 percent gain. 
    "I think the concern now is the peso is under pressure,
that's for sure, but contrary to other cases, we now see higher
interest rates," said Alexis Milo, chief economist for Mexico at
HSBC.
    "The yields on the 10-year bond are running above 9 percent,
we think that's high and that's how investors are showing the
medium to long term concerns about Mexico," said Milo, noting
10-year local bond yields were about 7.7 percent just after the
elections in early July.
    Brazil's equity benchmark closed up for the first
time this week, but volumes were only about two fifths of their
normal figures. Banco do Brasil vaulted about 1.9
percent to an all-time closing high.
    President-elect Jair Bolsonaro's incoming administration
said University of Chicago-trained economist Rubem Novaes would
be the bank's next chief. Novaes has served as board member to
Brazil's development bank BNDES.
    The real softened 0.1 percent.
    Equities in Colombia and Chile slid 0.1
percent and 0.2 percent, respectively, while those in Argentina
 marked time.    
        
    Key Latin American stock indexes and currencies at 2140 GMT
    
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets          975.99       0.1    -15.75
                                                  
 MSCI LatAm                    2592.45     -0.49     -8.33
                                                  
 Brazil Bovespa               87477.44      0.24     14.50
                                                  
 Mexico IPC                   41271.12     -0.55    -16.38
                                                  
 Chile IPSA                    5117.15     -0.22     -0.22
                                                  
 Argentina MerVal             30274.51      0.04      0.69
                                                  
 Colombia IGBC                12067.36     -0.12      6.13
                                                  
                                                          
 Currencies                              daily %     YTD %
                                          change    change
                                Latest            
 Brazil real                    3.8008      0.11    -12.83
                                                  
 Mexico peso                   20.3030     -0.31     -2.97
                                                  
 Chile peso                      668.5     -0.19     -8.06
                                                  
 Colombia peso                 3187.25      0.10     -6.44
 Peru sol                        3.372      0.12     -4.00
                                                  
 Argentina peso                36.4100     -0.33    -48.92
 (interbank)                                      
                                                  
 

 (Reporting by Aaron Saldanha in Bengaluru; 
Editing by Sandra Maler)
  
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