August 29, 2019 / 7:55 PM / 16 days ago

EMERGING MARKETS-LatAm stocks rise on trade hopes; Argentine debt plan in focus

 (Updates prices, adds details, changes quote)
    * Argentine investors asses plan to reprofile debt
    * Brazil steers clear of recession in Q2 
    * U.S.-China trade de-escalation hopes lift equities  

    By Agamoni Ghosh
    Aug 29 (Reuters) - Latin American stocks rose on Thursday as
Beijing's latest comments signalled a hopeful resolution to the
trade dispute with Washington, but Argentina's plan to
re-profile nearly $100 billion of its existing debt put its
assets under pressure.
    China's commerce ministry said both sides were discussing
the next round of talks scheduled for September and hoped U.S.
officials could cancel the planned additional tariffs to avoid
an escalation.
    Following that, U.S. President Donald Trump said in a Fox
News radio interview that trade talks were scheduled for next
Thursday "at a different level," but did not provide any
additional details.     
    MSCI's index of Latin American stocks rose
2% with Brazil's Bovespa leading gains helped by shares
of miner Vale and oil company Petrobras.
    The real moved 0.2% higher after data showed Brazil's
economy rebounded strongly in the second quarter after having
shrunk in the first, indicating Latin America's largest economy
comfortably avoided falling back into recession.
    Mexican peso was marginally lower, while Colombia's
peso jumped 1% as oil prices rose, lifted by a steep drop
in U.S. crude inventories. . 
    
    DEBT 'REPROFILE'       
    Argentine bond prices fell and country risk soared to levels
not seen since 2005 after the government said it would negotiate
with holders of its sovereign bonds and the International
Monetary Fund to extend debt maturities as a way of ensuring the
country's ability to meet its obligations.
    The peso, which fell nearly 3%, recovered after the
central bank intervened, while stocks on the Merval index
 dove 4.6%. 
    The peso has shed about 24% of its value, while the Merval
has plunged more than 45% since business-friendly Macri suffered
an unexpectedly large defeat in primaries at the hands of
populist-leaning Peronist candidate Alberto Fernandez. 
    "This plan is fine for now but what happens if Fernandez
wins in October," said  Win Thin, global head of emerging market
strategy at Brown Brothers Harriman in New York.
    "We have to wonder if he will stick with this (the debt
reprofile) because at this point we just don't know what he will
do."
    Investors fear a return of the left to power could herald
another full-blown debt crisis in Latin America's third-largest
economy. 
    
  Key Latin American stock indexes and currencies at 1920 GMT  
 Stock indexes                                 daily % change
                          Latest             
 MSCI Emerging Markets               971.39              0.63
                                             
 MSCI LatAm                         2558.74              1.99
                                             
 Brazil Bovespa                   100606.84              2.46
                                             
 Mexico IPC                        41872.22              2.27
                                             
 Chile IPSA                         4682.95              1.59
                                             
 Argentina MerVal                  24148.48            -5.144
                                             
 Colombia IGBC                     12513.56              0.58
                                             
                                                             
 Currencies                                    daily % change
                                     Latest  
 Brazil real                         4.1620              0.12
                                             
 Mexico peso                        20.1404             -0.22
                                             
 Chile peso                          720.55              0.35
                                             
 Colombia peso                      3436.08              1.07
 Peru sol                            3.3868              0.42
                                             
 Argentina peso                     57.8600              0.41
 (interbank)                                 
                                             
 

 (Reporting by Agamoni Ghosh in Bengaluru; Editing by Sandra
Maler)
  
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