EMERGING MARKETS-Latam stocks gain on Greece deal

Tue Nov 27, 2012 10:00am EST

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* International lenders agree to Greek debt plan
    * Brazil Bovespa rises 0.86 pct, Mexico IPC up 0.18 pct

    By Asher Levine
    SAO PAULO, Nov 27 (Reuters) - Latin American stocks gained
on Tuesday after global leaders agreed on a plan to reduce
Greece's debt, allowing for the release of critical bailout
funds to the troubled euro zone nation and feeding demand for
riskier assets.
    The MSCI Latin American stock index nearly
erased the previous session's losses, rising 0.44 percent to
3,597.65. 
    Oil companies and homebuilders drove Brazil's benchmark
Bovespa index to its third gain in four sessions, while
retailer Wal-Mart de Mexico supported Mexico's bourse.
    After weeks of wrangling, international lenders agreed on
Tuesday on a plan to cut Greek debt. The deal was a prerequisite
for the release of bailout funds to Greece and removes the
biggest risk of a sovereign default in the euro zone for now.
    Concern over Greece's role in a widening euro zone debt
crisis has weighed on demand for Latin American assets over the
past six months, with the region's stocks considered riskier
than safe-haven investments such as the U.S. dollar.
    Strategists at Morgan Stanley & Co expect Latin American
stock markets to post gains of up to 13 percent next year,
chiefly driven by more attractive valuations and growing risk
appetite amid improving earnings expectations in the United
States. 
    However, Guilherme Sand, a partner with Zenith Asset
Management in Porto Alegre, Brazil, said clearer signs of
economic growth both in local markets and abroad is needed to
support a sustainable rally.
    "The Greece deal helped but the trend is still a losing one
as the news we have is just palliative," he said.
    Brazil's benchmark Bovespa stock index added 0.86
percent to 57,224.41.
    State-controlled oil company Petrobras rose 1.8
percent, contributing most to the index's gains, while
homebuilder PDG Realty added 2.5 percent.
    Shares of OGX Petroleo e Gas Participa├žoes SA 
fell 1.3 percent. Bank of America Merrill Lynch analysts said on
Tuesday that the company's recent agreement to purchase a stake
in an oil block from Petrobras is positive but highlights the
critical issue of cash flow in the firm. 
    Shares of electric utilities Centrais Eletricas Brasileiras
SA and Companhia de Transmissao de Energia Eletrica
Paulista both gained over 5 percent on hope that the
government may be flexible on the terms for concession renewals.
    "Still, it's not very probable, which is why we're not
seeing a more significant gain in those shares," Sand added.
     The fate of Brazil's equity market will increasingly hinge
on government policies next year, with consumer stocks rising
due to incentives for consumption and shares in the energy and
financial sectors feeling the pinch of recent regulatory moves,
executives at Ita├║ Asset Management said Monday. 
    Mexico's IPC index stemmed a two-day slide, rising
0.18 percent to 41,952.76. The index has found resistance near
42,000 points for the previous three sessions.
    Shares of retail giant Wal-Mart de Mexico rose
0.4 percent, contributing most to the index's gains, while
conglomerate Alfa added 1.27 percent.
    Chile's IPSA index was little changed at 4,134.57
points, with gains by industrial conglomerate Copec 
offsetting losses by lender Banco de Chile. 
    
    Latin America's key stock indexes at 1433 GMT:
    
 Stock indexes                           daily %      YTD %
                          Latest          change     change
 MSCI LatAm                  3,597.65       0.44      -0.57
                                                  
 Brazil Bovespa             57,224.41       0.86       0.83
                                                  
 Mexico IPC                 41,952.76       0.18      13.15
                                                  
 Chile IPSA                  4,134.57       0.04      -1.03
                                                  
 Chile IGPA                 20,336.65       0.07       1.03
                                                  
 Argentina MerVal            2,342.08       0.09      -4.90
                                                  
 Colombia IGBC              14,110.97       0.06      11.41
                                                  
 Peru IGRA                  20,219.32       0.04       3.83
                                                  
 Venezuela IBC             392,686.13      -0.17     235.53
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