July 20, 2017 / 5:50 PM / 3 years ago

EMERGING MARKETS-Brazil real hits two-month high on bets of corporate inflows

    By Bruno Federowski
    SAO PAULO, July 20 (Reuters) - The Brazilian real
strengthened to a two-month high on Thursday as traders bet on
stronger capital inflows in coming weeks amid a batch of
corporate listings.
    Grupo Carrefour Brasil SA priced Brazil's largest initial
public offering in four years earlier this week, totaling 5.12
billion reais ($1.64 billion).
    Traders say demand is strong for an offering of Brazilian
depositary receipts in Colombia-based pharmaceutical firm Grupo
Biotoscana SA, with IPOs for renewable power firm Omega Geração
SA and reinsurer IRB Brasil Resseguros SA in the pipeline.
    Brazil's currency firmed 0.4 percent to 3.13 to the
dollar, leading gains in Latin America and rising for the fifth
straight trading day.
    "Without much news on the political side, the market turns
speculative and it would not surprise me if we saw it breaching
the 3.10 threshold," MultiMoney brokerage head of currency
trading Durval Correa said.
    Over the last two months, the Brazilian real rebounded from
its weakest levels in five months as fears eased that a
political crisis ensnaring President Michel Temer could derail
the implementation of his reform agenda.
    Other Latin American currencies were mostly stronger, with
the Mexican peso hovering near 14-month highs.
    Standard & Poor's decision to raise its outlook for Mexico's
sovereign rating, as well as a Reuters report detailing an
aggressive timetable for trade talks between Mexico, the United
States and Canada, have supported demand for the peso.

    Brazil's benchmark Bovespa stock index seesawed in
afternoon trading as traders avoided making big bets at the
start of the second-quarter corporate earnings season, which
gathers steam next week.
    Shares of homebuilder Cyrela Brazil Realty SA
rose 2.3 percent to the highest in two months, leading gains on
the index, after reporting a 35 percent jump in second-quarter
net sales.
    "We believe sales in the mid/high-end segment should remain
weak for a while, explaining our increased caution on the
segment. Having said that, we also think Cyrela is the name to
surf a potential rebound in sales," Banco BTG Pactual analysts
wrote in a note to clients.
    Shares of Carrefour Brasil were nearly flat on
their market debut after falling as much as 4.3 percent from
their IPO price earlier in the day.
    The listing priced at the bottom of a suggested price range,
with fund managers reluctant to bid at higher prices due to a
lack of clear competitive advantage against rival GPA SA
    Key Latin American stock indexes and currencies at 1710 GMT:
 Stock indexes                  Latest        Daily     YTD
                                                pct     pct
                                             change  change
 MSCI Emerging Markets            1,060.99     0.08   22.95
 MSCI LatAm                       2,740.27     0.34   16.68
 Brazil Bovespa                  65,056.10    -0.19    8.02
 Mexico S&P/BVM IPC              51,184.11     0.19   12.14
 Chile IPSA                       5,028.39    -0.18   21.13
 Chile IGPA                      25,110.71    -0.16   21.11
 Argentina MerVal                21,583.76     0.62   27.58
 Colombia IGBC                   10,880.35    -0.95    7.43
 Venezuela IBC                  131,324.09        0  314.20
 Currencies                         Latest    Daily     YTD
                                                pct     pct
                                             change  change
 Brazil real                        3.1349     0.44    3.65
 Mexico peso                       17.5070     0.25   18.49
 Chile peso                          651.4     0.32    2.96
 Colombia peso                    2,999.46     0.12    0.07
 Peru sol                            3.239     0.06    5.40
 Argentina peso (interbank)        17.1450     0.09   -7.41
 Argentina peso (parallel)           17.75     0.39   -5.24

($1 = 3.1309 reais)

 (Reporting by Bruno Federowski; Additional reporting by Claudia
Violante; Writing by Bruno Federowski; editing by Diane Craft)
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