June 13, 2019 / 8:19 PM / a year ago

EMERGING MARKETS-Brazil currency, shares rise on pension overhaul proposal

 (Updates prices; adds details on Argentina's markets)
    By Sruthi Shankar
    June 13 (Reuters) - The Brazilian real firmed and stocks
climbed on Thursday, as investors welcomed a report on the
government's proposal to overhaul the country's pension system. 
    The real rose about 0.4% while Sao Paulo-listed
stocks also gained 0.4% to touch a near three-month high
after Brazil's congressional pension reform bill coordinator
Samuel Moreira said the proposed changes would generate savings
of 913.4 billion reais ($237 billion) over the next decade.

    The committee had targeted savings of between 800 billion
and 1 trillion reais through a range of measures, including
raising the minimum retirement age and increasing workers'
    The bill will now be debated, voted on and sent to the lower
house plenary for a vote. If passed in the form Moreira
presented on Thursday, it will likely be seen as a success for
the administration.
    The real had risen as much as 0.9% earlier in the session
and stocks were up nearly 1%.
    "All indications suggest that pension reform remains on
track and may leave the committee with greater savings than the
consensus expected," Dirk Willer, head of emerging market
strategy at Citi Research, and Kenneth Lam, an emerging markets
FX strategist, wrote in a note.
    The social security overhaul is a cornerstone of President
Jair Bolsonaro's economic agenda, aimed at shoring up dire
public finances and restoring investor confidence to kickstart
an economic recovery.
    Most other currencies in the region, including the Mexican
, Colombian and Chilean pesos made tepid
moves against the U.S. dollar as concerns about U.S.-China trade
tensions and the Federal Reserve's upcoming monetary policy
meeting remained a focus.
    The Argentine peso advanced for a third day in a sign
of approval from markets after President Mauricio Macri picked a
moderate running mate that could broaden his voter base in
elections to be held later this year.
    Argentina's official statistics agency INDEC said consumer
prices rose 3.1% in May, in line with a Reuters poll of
economists, keeping accumulated inflation in 12 months through
May at 57.3%.
    Among stocks, a more than 2% jump in oil prices helped 
shares in Brazil's state-run oil company Petróleo Brasileiro SA
 gain over 1% and boost the Bovespa index.
    The commodity's price got a boost following a suspected
attack on two tankers in the Gulf of Oman near Iran and the
Strait of Hormuz, through which a fifth of global crude oil
    Colombia's local stocks tacked on 0.66%, with energy
firm Ecopetrol SA riding on the back higher oil prices
    Bank stocks were a drag in Brazil, with shares of Bradesco
 and Itau Unibanco falling more than 1% on
the prospect of higher taxes for financial institutions.
    Company news drove shares in Brazilian petrochemical
producer Braskem, which rose nearly 3% after it said
an appeals court overturned a decision blocking dividend
    Brazilian food processor BRF SA jumped 5% to the
top of Bovespa after J.P. Morgan upgraded the company to
"overweight" from "neutral".

    Key Latin American stock indexes and currencies at 1945 GMT
 Stock indexes                Latest        Daily
 MSCI Emerging Markets          1,021.87    -0.43
 MSCI LatAm                     2,785.63    -0.35
 Brazil Bovespa                98,741.76     0.43
 Mexico IPC                    43,413.39    -0.88
 Chile IPSA                     5,074.46     0.13
 Argentina MerVal              40,748.20    -0.45
 Colombia IGBC                 12,314.04      0.8
 Currencies                       Latest    Daily
 Brazil real                      3.8546     0.35
 Mexico peso                     19.1584     0.04
 Chile peso                          696    -0.09
 Colombia peso                  3,263.54     0.06
 Peru sol                           3.33    -0.03
 Argentina peso (interbank)      43.3000     0.92

 (Reporting by Sruthi Shankar in Bengaluru; Editing by Sandra
Nuestros Estándares:Los principios Thomson Reuters
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