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


Reuters


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.

"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. O/R

Colombia's local stocks tacked on 0.6%, with energy firm Ecopetrol SA riding on the back higher oil prices . O/R

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

Latest

daily % 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

Latest

daily % change

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 (interbank)

43.5600

0.32

($1 = 3.8412 reais)






This article appears in: Stocks , World Markets , Economy , Politics



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