EMERGING MARKETS-Brazil's real outperforms Latam peers

  • 9/27/2021
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* Brazil"s real up 0.1% against stronger dollar * Colombian stocks jump 1.4% as Ecopetrol rallies By Susan Mathew Sept 27 (Reuters) - Central bank intervention saw Brazil"s real outperform most Latin American currencies on Monday, while a near 4% jump for oil major Ecopetrol put the Colombian equity benchmark on course for its best session in nearly six weeks. Most regional currencies weakened as the dollar perked up on rising Treasury yields and after upbeat U.S. durable goods data. Brazil"s real ticked 0.1% higher. The central bank late on Friday said it would hold additional twice weekly auctions of traditional currency swaps, starting Sept. 27, to address demand from banks dismantling their "over-hedge" position to protect against exchange rate fluctuations. But, the currency is down almost 3% so far this year, as political uncertainty outweighed headwinds from an aggressively hawkish central bank. Worries about policy moves by President Jair Bolsonaro leading up to elections next year have increased as his popularity plummets. "When we look at the broader institutions in Brazil, the room for Bolsonaro to make significant trouble is limited but it will be very noisy over the next few months. That will probably turn some investors away, but create valuation opportunities," said Derrick Irwin, portfolio manager at Wells Fargo"s Berkeley Street Emerging Markets Equity team. Stocks in Sao Paulo rose 0.5% with oil stocks in the lead as crude prices rose amid supply concerns. Oil giant Petrobras rallied around 2%. The Bovespa index is down about 4.6% this year compared with a 2% slide in the broader EM shares index "Threading the needle in Brazil is going to be challenging but there are some really good companies," Irwin said, adding that in Latam, they are overweight on Mexican equities. Mexico"s IPC index, up 0.8% on Monday, has gained about 17% in 2021. Cement maker Cemex rose 2.6% after rating agency S&P revised its outlook to positive from negative. Colombia"s COLCAP index jumped 1.4% to a two-week high as Ecopetrol looked to log its biggest gain in five weeks. Ecopetrol"s crude oil exports to Asia is seen rising, the company"s chief executive said on Monday. Some 63% of the oil firm"s crude exports have been shipped to Asia in 2021, compared with 52% last year. The moves in Latam equities were in line with most other EM shares on Monday which climbed as hopes rose that Beijing would step in to limit the fallout from debt-laden Chinese developer Evergrande. Key Latin American stock indexes and currencies at 1433 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1265.63 0.04 MSCI LatAm 2306.94 0.45 Brazil Bovespa 113637.57 0.31 Mexico IPC 51487.38 0.75 Chile IPSA 4385.50 0.18 Argentina MerVal 75000.86 1.106 Colombia COLCAP 1327.65 1.4 Currencies Latest Daily % change Brazil real 5.3409 0.05 Mexico peso 20.1080 -0.34 Chile peso 795.7 -0.35 Colombia peso 3839.83 -0.20 Peru sol 4.1031 -0.13 Argentina peso 98.6700 -0.08 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Alistair Bell)

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