EMERGING MARKETS-Mexican markets rise as reforms take step forward

Fri May 16, 2014 1:40pm EDT

By Jean Arce and Asher Levine
    MEXICO CITY/SAO PAULO, May 16 (Reuters) - Mexican stocks
rose on Friday amd the country's peso curency  appreciated after
legislators approved a bill that will help pave the way for
major energy reform measures.
    The broader MSCI Latin American stock index 
rose slightly, with Brazilian and Chilean stocks both edging
higher.
    So-called secondary laws for electoral reform were passed in
Mexico's Congress on Friday. 
    Mexico's opposition conservative National Action Party had
demanded their passage before it would vote for legislation to
implement President Enrique Pena Nieto's energy reform, a
central plank of his vision to breathe new life into the
economy. 
    "In one week, they managed to push forward and approve
political reforms, and the vote was strongly in favor, so that
leads you to believe that the negotiations for telecoms will
also go well and could be done this month, leaving time for
energy reform in June," said Rafael Camarena, an economist with
Santander in Mexico City. 
    Camarena added that an improving outlook for the U.S.
economy was supporting Mexican assets.
    The benchmark IPC stock index nearly made up for the
previous session's losses, outpacing other stock indexes in the
region.
    Widely-traded shares such as those of telecommunications
firm America Movil and bottling firm Femsa
, which tend to attract foreign investors looking
for exposure to the Mexican market, contributed most to the
index's rise.
    Shares of cement manufacturer Cemex also rose
after it announced a new chief executive following the sudden
death of Lorenzo Zambrano earlier this week. 
    Brazil's Bovespa stock index was little changed as a
rise in electric utilities such as Eletrobras, which
posted strong quarterly earnings on Thursday, offset a decline
in commodities firms such as iron-ore miner Vale SA.
Vale on Thursday said it would shut down its money-losing
Integra coal mine in Australia. 
    Chile's IPSA index rebounded from Thursday's loss,
driven by a 45.5 percent jump in shares of CFR Pharmaceuticals
SA following news that Abbott Laboratories 
would acquire the company in a $2.9 billion deal.
 
    Latin American currencies were mostly stronger against the
dollar a day after weak economic data from the United States and
euro zone cut investor appetite for riskier investments.
    "Today we are seeing a correction (with the dollar
retreating)," said Tarcisio Rodrigues, foreign exchange director
at Banco Paulista in Sao Paulo. 
    The Brazilian real strengthened 0.45 percent to 2.21
reais per dollar, within what analysts see as an informal
trading band of 2.20 to 2.25 reais being enforced by the central
bank through currency interventions.
    The Mexican and Chilean Pesos  also strengthened
about 0.5 percent against the dollar, while Colombia's peso
 was little-changed.
    
    Key Latin American stock indexes and currencies at 1642 GMT:
    
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets           1032.45      0.33      2.63
                                                    
 MSCI LatAm                      3383.01      0.62      5.04
                                                    
 Brazil Bovespa                 53891.02      0.07      4.63
                                                    
 Mexico IPC                     41944.15      0.92     -1.83
                                                    
 Chile IPSA                      3961.21      0.35      7.08
                                                    
 Chile IGPA                     19353.15       0.3      6.18
                                                    
 Argentina MerVal                6822.74      0.56     26.56
                                                    
 Colombia IGBC                  13576.72     -0.21      3.87
                                                    
 Peru IGRA                      15739.55     -0.33     -0.09
                                                    
 Venezuela IBC                   2185.75         0    -20.13
                                                    
                                                            
 Currencies                                daily %     YTD %
                                            change    change
                                  Latest            
 Brazil real                      2.2120      0.35      6.55
                                                    
 Mexico peso                     12.9123      0.36      0.91
                                                    
 Chile peso                        550.5      0.51     -4.43
                                                    
 Colombia peso                   1925.94      0.00      0.31
 Peru sol                          2.786     -0.04      0.25
                                                    
 Argentina peso (interbank)       8.0600     -0.06    -19.45
                                                    
 Argentina peso (parallel)         11.03     -0.54     -9.34
                                                    
 
        

 (Additional reporting by Bruno Federowski in Sao Paulo Editing
by W Simon)
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