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EMERGING MARKETS-LATAM Airlines soars, Mexican peso logs more than 1% weekly loss

Credit: REUTERS/RODRIGO GARRIDO

Airlines headlined stock moves in Latin America on Friday, after Delta Air Lines' purchase of a stake in Chile's LATAM Airlines sent its shares soaring 30%, while Brazilian counterpart Gol slid.

By Susan Mathew

Sept 27 (Reuters) - Airlines headlined stock moves in Latin America on Friday, after Delta Air Lines' DAL.N purchase of a stake in Chile's LATAM Airlines LTM.SN sent its shares soaring 30%, while Brazilian counterpart Gol GOLL4.SA slid.

LATAM's surge saw Chile stocks .SPIPSA jump up to 2.5% during the session and hit their highest in almost five months, outperforming regional peers.

Delta bought 20% of LATAM for $1.9 billion in a major new airline partnership, but also sold its stake in Brazil's largest airline Gol, which sent shares 6.5% lower followed closely by Gol's loyalty program, Smiles Fidelidade SMLS3.SA, which slid 5.3%.

Brazil main Bovespa index .BVSP lost 0.2%, with gains in toll road operator Ecorodovias' ECOR3.SA on winning an auction helping cap losses.

Brazil stocks were set to extend gains to a fifth week.

Analysts at TS Lombard say the lower interest rate environment in Brazil will benefit equities into 2020.

"Both individuals and companies will continue to benefit from falling borrowing costs going into 2020. We expect the gradual recovery of the credit markets will continue through next year as the job market begins to show more convincing signs of improvement."

Elsewhere in the region, Colombian .IGBC slipped 0.7%, while those in Mexican shares .MXX extended losses to a fifth day, tracking Wall Street's fall. .N

Conglomerate Femsa FEMSAUBD.MX was the biggest decliner on Mexico's main index after a Scotiabank downgrade to 'Neutral'.

On the week, Mexico's main index lost around 1.6% to break a five-week winning streak.

Among currencies, Brazil's real firmed, while most other Latam currencies weakened against a steady dollar. FRX/

The real BRL= rose 0.4% on Friday, with sentiment getting a lift after the country's Treasury Secretary Mansueto Almeida said the government's primary deficit this year will likely be 15-20 billion reais below the official target of 139 billion reais.

On the week, the currency made slight losses in its 10th weekly loss in 11.

Mexico's peso MXN= lost 0.1% on the day and more than 1% over the week which was made volatile by U.S. President's Donald Trumps' warnings that an impeachment move launched against him may derail a North American trade deal between Mexico, Canada and the United States.

Key Latin American stock indexes and currencies at 1958 GMT:

Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1000.46

-0.88

MSCI LatAm .MILA00000PUS

2682.58

-0.23

Brazil Bovespa .BVSP

105105.12

-0.2

Mexico IPC .MXX

42871.56

-0.26

Chile IPSA .SPIPSA

5099.64

1.46

Argentina MerVal .MERV

28735.49

2.015

Colombia IGBC .IGBC

12941.63

-0.71

Currencies

Latest

Daily % change

Brazil real BRBY

4.1553

0.14

Mexico peso MXN=D2

19.6976

-0.17

Chile peso CLP=CL

725.85

-0.01

Colombia peso COP=

3456.55

-0.37

Peru sol PEN=PE

3.381

0.03

Argentina peso (interbank) ARS=RASL

57.3200

-0.17

(Reporting by Susan Mathew in Bengaluru Editing by Sonya Hepinstall)

((susan.mathew@thomsonreuters.com; +91-80-6749-1130))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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