April 24, 2019 / 9:16 PM / 2 months ago

EMERGING MARKETS-Latam markets weaker, Brazil plagued by pension reform worries

 (Recasts throughout, updates prices)
    By Susan Mathew
    April 24 (Reuters) - Brazil's currency and stocks fell on
Wednesday as potential hurdles for pension reforms weighed,
while other Latin American stocks tracked world equities lower.
Currencies succumbed to a stronger dollar.
    MSCI's index of Latin American shares fell
0.9 percent, while its index of regional currencies
 slipped 0.4 percent, both having touched their
lowest since late March as stocks and currencies across Latam
were well in the red. 
    Brazil's real slipped 1.8 percent and hit a four week
low, while the Bovespa stock index fell 0.9 percent on
broad-based losses, giving up last session's gains.
    A proposal to change Brazil's bloated pension system, seen
as important to controlling the fiscal deficit, cleared a
congressional hurdle late on Tuesday, following a lengthy debate
that highlighted the government's struggle to build support for
its signature reform policy.
    The congressional vote clears the way for the bill to be
considered by a special committee, and focus now turns to the
hurdles it may face there.
    "There is no reason to celebrate, this is only the first
step," said Silvio Campos Neto, an economist at Tendências
Consultoria. "The bill will next be passed on to the special
commission, where the battle will be much harder."
    Unexpectedly bad March jobs data and declining tax revenue
figures also added to concerns about Brazil's sputtering
economy, weighing on investor sentiment.

    "The jobs data reinforces the importance of pension reforms
as the government has to begin to generate incentives in the
economy," Régis Chinchila, an analyst at Terra Investimentos
said.
    In Mexico, shares and the currency extended
losses to a third straight session, with the peso hitting the
lowest in two and half weeks as the dollar gained significantly.

    A retreat in oil prices also hurt the crude exporter's
currency. Colombia's peso, also an oil exporter, slid to
its lowest in 3-1/2 weeks.
    Data on Wednesday showed that Mexican consumer price
inflation accelerated faster than expected in the first two
weeks of April, restricting the central bank's scope to ease
borrowing costs in the coming months from its highest level in
over 10 years.
    Chile and Colombian also declined as
equities dipped worldwide.
    Argentine shares and the currency dropped 3.8
percent as uncertainty over recession and rising inflation fed
investor nervousness about the October presidential election.

    Investors remained uncertain about whether President
Mauricio Macri can overcome political fallout from his unpopular
fiscal austerity drive to be re-elected in October.
    
    Latin American stock indexes and currencies at 2100 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1084.52     -0.48
                                        
 MSCI LatAm                    2734.45     -0.94
                                        
 Brazil Bovespa               95045.43     -0.92
                                        
 Mexico IPC                   45045.33     -0.23
                                        
 Chile IPSA                    5202.96     -0.27
                                        
 Argentina MerVal             29746.60     -3.82
                                        
 Colombia IGBC                12982.77     -0.17
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.9922      -1.8
                                        
 Mexico peso                   19.0678     -0.84
                                        
 Chile peso                      672.8     -0.76
                                        
 Colombia peso                 3219.03     -1.28
 Peru sol                        3.323     -0.36
                                        
 Argentina peso                43.9000     -3.35
 (interbank)                            
                                        
 


 (Reporting by Susan Mathew in Bengaluru, Stéfani Inouye and
Laís Martins in Sao Paulo; editing by Grant McCool)
  
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