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Foreign debt financing by Brazilian issuers surges in 2024

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Mexico's Alsea down after quarterly results

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MSCI's Latam stocks index down 0.3%, FX flat

(Updated at 2012 GMT)

By Shashwat Chauhan, Johann M Cherian and Pranav Kashyap

Oct 23 (Reuters) - Most Latin American currencies were

steady against a stronger dollar on Wednesday, while oil

exporter Colombia's peso depreciated to levels seen more than a

year ago, tracking weaker crude oil prices.

MSCI'S index tracking currencies in the region

was flat, as the U.S. dollar continued its rise

to hit a three month high with investors factoring in a measured

pace of interest rate cuts by the Federal Reserve and upcoming

U.S. elections.

Colombia's peso weakened 1.5% to 4,325.34 to the

dollar as prices of crude oil, a top export commodity, fell over

1%. Markets also weighed upcoming interest rate cuts by the

local central bank and excessive fiscal spending plans for the

upcoming year.

The local stock index lost 1.7%, pressured by

rising yields on 5-year and ten-year bonds

.

Brazil's real was muted. The director of

international affairs of Brazil's central bank, said that

inflation expectations in the region's largest economy have been

consistently higher than the monetary authority's target.

Most countries in Latin America have been on the path to

lower borrowing costs, however Brazil is on track to lift local

interest rates further by over 200 basis points due to

persistent price pressures.

Concerns about the country meeting its 2024's fiscal

targets and central bank independence on monetary policy have

weighed on the real that is down nearly 15% this year.

"The policy rate differential between Brazil and the

U.S. should improve by 300-400 bps... we would expect any

improvement in confidence around fiscal policy to support both

Brazilian bonds and (real)," said Michael Arno, portfolio

manager & senior research analyst at Brandywine Global.

Copper producer Chile's peso inched up 0.1%, while

Peru's sol was flat.

On the flip side, Mexico's peso appreciated 0.6% with

all eyes on the U.S. vote on Nov. 5 as prediction markets favor

a second Donald Trump presidency. His polices are seen as

unfavorable to the region's second-largest economy.

On the equities front, a gauge for regional bourses

shed 0.3%, with Brazil's Bovespa down

0.7%.

Azul ( AZUL ) lost over 3%. The carrier is in talks with

multiple parties to raise about $400 million in fresh capital

via debt financing.

Foreign debt financing by Brazilian issuers is surging

again, reaching a three-year high in 2024, as local companies

seek to refinance existing obligations or make new investments.

Mexican stocks lost 0.5% with restaurant chain

operator Alsea sliding 5% after the company reported

weak quarterly results.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

MSCI Emerging Markets 1142.57 0.03

MSCI LatAm 2162.74 -0.35

Brazil Bovespa 129088.25 -0.66

Mexico IPC 52097.58 -0.52

Chile IPSA 6686.98 0.18

Argentina Merval 1774852.6 -1.808

9

Colombia COLCAP 1321.55 -1.69

Brazil real 5.6947 -0.09

Mexico peso 19.8348 0.57

Chile peso 945.2 0.16

Colombia peso 4325.34 -1.47

Peru sol 3.753 -0.08

Argentina peso (interbank) 984.5 -0.05

Argentina peso (parallel) 1210 2.89