* Real set to add over 7% in Nov * Latam stocks set for second-best month on record * Brazil sovereign debt issues to remain challenging- economist (Updates prices throughout, adds comments) By Ambar Warrick and Shreyashi Sanyal Nov 30 (Reuters) - Brazil"s real was set to outperform other Latin American currencies in November on improving fiscal and economic trends, while optimism over a COVID-19 vaccine and the prospect of stable U.S. politics saw most regional stocks and units gaining for the month. The currency, which fell 0.2% the day, was set to add more than 7% for November, its best month in two years. Brazilian stocks were set for their best month in four years with a more than 16% gain. Brazil"s public sector posted an unexpected surplus in October, the latest in a line of positive data that has underscored a fledgling recovery in Latin America"s largest economy. But the real has vastly underperformed its regional peers this year, due to rising coronavirus cases and concerns over sustainable government spending due to the pandemic. "Debt financing will remain challenging amid a large number of maturities in early 2021. This outlook could change if the legislature passes measures that will reduce spending, but failure to move ahead with reforms mean that the Treasury will continue to face a difficult environment," Wilson Ferrarezi, economist at TS Lombard, wrote in a note. Other regional stocks and currencies were muted, but were set for strong monthly gains after a series of positive COVID-19 vaccine updates, while Joe Biden"s U.S. presidential win raised hopes of stabler trade policies in the world"s largest economy. The MSCI"s index of Latam stocks was set to add more than 22% in November, its second-best month on record. As oil prices surged over the month on expectations of recovering demand after the rollout of a vaccine, the currencies of crude exporters Mexico and Colombia were set to add about 5% and 7.6% for the month, respectively. Mexico"s peso was also aided by the central bank pausing a rate-cutting cycle. "In Mexico, softer-than-expected inflation in November reinforces our call that Banxico cuts are on the horizon," said strategists at J.P.Morgan. "However, we maintain that the 75bp easing cycle does not begin until March and ends in June." Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1205.57 -2.04 MSCI LatAm 2205.44 -1.49 Brazil Bovespa 109184.68 -1.26 Mexico IPC 41591.07 -0.2 Chile IPSA 4032.87 -2.04 Argentina MerVal 54439.74 -1.782 Colombia COLCAP 1256.20 -0.44 Currencies Latest Daily % change Brazil real 5.3567 -0.59 Mexico peso 20.1527 -0.63 Chile peso 763.7 0.47 Colombia peso 3594.25 0.30 Peru sol 3.6057 -0.10 Argentina peso (interbank) 81.3000 -0.28 Argentina peso (parallel) 151 3.31 (Reporting by Ambar Warrick and Shreyashi Sanyal in Bengaluru; Editing by Angus MacSwan and Richard Chang)