June 13, 2019 / 2:43 PM / 4 months ago

EMERGING MARKETS-Brazil's real, stocks rise with focus on pension reform proposal

    June 13 (Reuters) - The Brazilian real firmed and stocks
gained on Thursday, as investors assessed a report on the
government's proposal to overhaul the country's pension system.
    The real climbed as much as 0.9% to outperform its
Latin American peers, while Sao Paulo stocks jumped
nearly one percent after Brazil's congressional pension reform
bill coordinator Samuel Moreira said the proposed changes would
result in savings of around 915 billion reais ($238.21 billion).
    The committee had targeted savings of between 800 billion
and 1 trillion reais over the next decade through a range of
measures, including raising the minimum retirement age and
increasing workers' contributions. The bill will now be debated,
voted on and sent to the lower house plenary for a vote.
    The real eased slightly to trade up 0.7% and stocks pared
some gains as details from the report emerged.
    "All indications suggest that pension reform remains on
track and may leave the committee with greater savings than the
consensus expected," Dirk Willer, head of emerging market
strategy at Citi Research, and Kenneth Lam, an emerging markets
FX strategist, wrote in a note.
    The social security overhaul is a cornerstone of President
Jair Bolsonaro's economic agenda, aimed at shoring up dire
public finances and restoring investor confidence to kickstart
an economic recovery.
    Other currencies in the region, including the Mexican
, Colombian and the Chilean pesos made tepid
moves against the U.S. dollar as concerns about U.S.-China trade
tensions and U.S. monetary policy remained a focus.
    However, a jump in oil prices by as much as 4% helped shares
in Brazil's state-run oil company Petróleo Brasileiro SA
 gain 1.8% and boost the Bovespa index.
    Brazilian food processor BRF SA was the biggest
gainer on the index, rising 5% after J.P. Morgan upgraded the
company to "overweight."
    Oil gave back some of its losses from Wednesday after a
suspected attack on two tankers in the Gulf of Oman near Iran
and the Strait of Hormuz, through which a fifth of global oil
consumption passes.
    Colombia's local stocks tacked on 0.6%, with energy
firm Ecopetrol SA riding on the back higher oil prices
.
    Company news drove shares in Brazilian petrochemical
producer Braskem, which jumped 3.3% after it said an
appeals court overturned a decision blocking dividend payments.


    Key Latin American stock indexes and currencies at 1425 GMT 
    
 Stock indexes                       daily %
                            Latest    change
 MSCI Emerging Markets      1022.44    -0.37
                                     
 MSCI LatAm                 2797.99     0.09
                                     
 Brazil Bovespa            98991.79     0.68
                                     
 Mexico IPC                43744.92    -0.13
                                     
 Chile IPSA                 5071.94     0.08
                                     
 Argentina MerVal          39801.40    -2.76
                                     
 Colombia IGBC             12278.51     0.51
                                     
                                            
 Currencies                          daily %
                                      change
                             Latest  
 Brazil real                 3.8410     0.70
                                     
 Mexico peso                19.1749    -0.05
                                     
 Chile peso                   695.4     0.00
                                     
 Colombia peso               3262.1     0.11
                                     
 Peru sol                     3.328     0.03
                                     
 Argentina peso             43.5600     0.32
 (interbank)                         
                                     
 ($1 = 3.8412 reais)

 (Reporting by Sruthi Shankar in Bengaluru; Editing by
Bernadette Baum)
  
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