November 21, 2017 / 3:48 PM / in a year

EMERGING MARKETS-Brazil stocks hit 3-week high on pension reform hopes

    By Bruno Federowski
    SAO PAULO, Nov 21 (Reuters) - Brazilian stocks on Tuesday
touched a three-week high on rising investor hopes that
lawmakers will approve a plan to streamline the social security
system and curb growth of public debt.
    Concerns over President Michel Temer's ability to pass the
controversial measure had spooked local markets following a
smaller-than-expected show of support for the center-right
president in a recent vote.
    But efforts by Temer to appease lawmakers have rekindled
expectations that the bill, seen as critical to boosting
long-term growth, will be approved, even if the government needs
to water it down to do so.
    Temer tapped an ally of House Speaker Rodrigo Maia as
minister in a bid to gather more lawmaker support, three sources
told Reuters on Monday, further assuaging investor angst.
    "Signs of common ground between Temer and Maia suggest some
sort of political compromise and real chances that the pension
reform is approved," analysts at Lerosa Investimentos brokerage
wrote in a client note.
    The benchmark Bovespa stock index rose 1.8 percent,
leading gains among regional markets. Blue chips such as lender
Itaú Unibanco Holding SA, miner Vale SA
and state-controlled oil company Petróleo Brasileiro SA
 added the most points to the index.
    The Brazilian real strengthened 0.1 percent, in line
with gains on other Latin American currencies as rising prices
of basic products fueled investor demand.
    Iron ore futures tracked a 3 percent jump in China-listed
steel prices, supported by expectations that demand in the
world's top consumer would bounce back when production curbs are
lifted after winter.
    Crude prices also advanced due to bets on an extension next
week to OPEC output cuts, though prices remained under pressure
from signs of higher output in the United States.
    Key Latin American stock indexes and currencies at 1530 GMT:
 Stock indexes                             daily %     YTD %
                                            change    change
 MSCI Emerging Markets            1152.18     1.42     31.76
 MSCI LatAm                       2808.19     1.61     18.07
 Brazil Bovespa                  74755.37     1.79     24.12
 Mexico S&P/BVM IPC              47942.57     0.18      5.04
 Chile IPSA                       5175.19     1.95     24.66
 Chile IGPA                      26048.17     1.73     25.63
 Argentina MerVal                27290.68      0.6     61.31
 Colombia IGBC                   10873.52     0.51      7.36
 Venezuela IBC                     699.85     0.02    -97.79
 Currencies                                daily %     YTD %
                                            change    change
 Brazil real                       3.2572     0.10     -0.25
 Mexico peso                      18.8590     0.69     10.00
 Chile peso                         636.8     0.09      5.32
 Colombia peso                     2999.9     0.27      0.05
 Peru sol                           3.234     0.12      5.57
 Argentina peso (interbank)       17.5075    -0.13     -9.32
 Argentina peso (parallel)          18.04     0.28     -6.76
 (Reporting by Bruno Federowski; Editing by Meredith Mazzilli)
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