EMERGING MARKETS-Latam stocks fall as Greek fiscal worries return

Tue Nov 13, 2012 11:37am EST

Related Topics

* IMF, euro zone officials disagree on Greek debt timeline
    * Government moves rattle Brazil's electric sector
    * Brazil's Bovespa falls 0.45 pct, Mexico's IPC down 0.16
pct

    By Asher Levine and Danielle Assalve
    SAO PAULO, Nov 13 (Reuters) - Latin American stocks dropped
to their lowest level in over two months on Tuesday as investor
concern over to Greece's fiscal problems sapped demand for
riskier assets.
    Brazil's Bovespa was on pace for a fifth straight
session of losses, as shares of electric utilities swung lower
amid the ongoing fallout from the government's latest plans for
the industry.
    Mexico's IPC returned most of the previous session's
gains, with telecommunications firm America Movil 
contributing most to the index's move downward.
    The MSCI Latin American stock index dropped
0.76 percent to 3,554.18 as a technical indicator known as the
relative strength index neared its closest to "oversold" levels
in over five months.
    Shares were pressured by increased risk aversion after
officials from the euro zone and the International Monetary Fund
publicly disagreed over the way Greece would reduce its heavy
debt burden.
    Some of that pressure was relieved later in the session
after a German newspaper said Berlin was working on a single aid
package of more than 44 billion euros ($55.9 billion) to cover
Greek debt repayments this year.  
    "Greece seemed like a problem that was basically resolved
and here we have it re-emerging," said Alexandre Montes, an
analyst with Lopes Filho e Associados in Rio de Janeiro. "The
Bovespa isn't falling a lot but it certainly isn't a very
favorable situation."
    Brazil's benchmark Bovespa stock index fell 0.45
percent to 56,805.35, with preferred shares of iron-ore mining
giant Vale and oil firm OGX contributing
most to the index's losses.
    Electric utilities posted some of the biggest swings on the
index as the government's expanding role in the sector continued
to rattle a conservative industry.
    Shares of power company Cteep rose 10.3 percent
after the company said on Monday that its board recommended
against renewing an expiring concession to transmit power,
rejecting a government plan to lower electricity costs to spur
economic growth. 
    In contrast, state-led power company Eletrobras 
dropped 3.7 percent, contributing to a 22-percent decline over
seven sessions. Investors are concerned the company will be
forced to accept concession renewals at sharply lower tariffs,
already below those charged by private-sector competitors.
    "I see very difficult days ahead for the company if it
renews the concessions," added Montes. "The problem is that
Eletrobras' controlling shareholder is the government. It can go
to Eletrobras and say 'You are going to renew those concessions
because I said so.'"
    The Bovespa has fallen 4.3 percent over the past five
sessions to its lowest level in two months as foreign investors
reduce their exposure due to worries over the looming U.S.
fiscal cliff and Europe's debt crisis.
    "We are getting to the end of the year with very little news
to push the Bovespa out of its current range," said Rogério
Oliveira, an equities specialist at Icap Corretora in Rio de
Janeiro. "I don't see many people taking long-term positions,
its mostly short-term turnover and arbitrage."
    Mexico's IPC index dropped 0.16 percent as shares of
telecommunications firm America Movil, controlled by billionaire
Carlos Slim, fell 1 percent.
    Shares of Latin America's biggest restaurant operator Alsea
 rose 0.3 percent after the company said on Monday it
will seek a 29 million peso ($2.18 million) share offering,
significantly smaller than the offering it had reported last
month. 
    Chile's IPSA index slid for the fifth straight
session, losing 0.25 percent to trade at a six-week low of
4,213.93.
    Shares of regional carrier LATAM Airlines fell 0.83
percent after the company posted a $63.7 million net loss for
the third quarter on Monday. 
    
    Latin America's key stock indexes at 1627 GMT:
 Stock indexes           Latest        Daily pct    YTD pct
                                          change     change
 MSCI Latam                  3,554.18      -0.76      -0.58
                                                  
 Brazil Bovespa             56,805.35      -0.45       0.09
                                                  
 Mexico IPC                 40,792.76      -0.16      10.02
                                                  
 Chile IPSA                  4,213.93      -0.25       0.87
                                                  
 Chile IGPA                 20,656.27      -0.18       2.62
                                                  
 Argentina MerVal            2,378.23      -0.67      -3.43
                                                  
 Colombia IGBC              14,190.51      -0.80      12.04
                                                  
 Peru IGRA                  20,977.90      -0.39       7.73
                                                  
 Venezuela IBC             376,763.50       2.38     221.92
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