March 5, 2019 / 6:06 PM / 4 months ago

EMERGING MARKETS-LatAm stocks fall; ratings risks hover over Mexican firms

    By Agamoni Ghosh
    March 5 (Reuters) - Mexican shares led the fall for Latin
American stock markets on Tuesday as investors worried about
possible rating downgrades for a number of companies, while
currencies in the region were mixed against as strong dollar
amid higher oil prices.
    MSCI's index for Latin American stocks
barely managed to hold steady as losses on Mexico's IPC index
 offset gains made by Colombia's IGBC index with
markets in Brazil and Argentina closed for the Carnival holiday.
    Shares in Mexican telecommunications firm America Movil
 and upscale retailer Liverpool fell,
while those of Coca-Cola Femsa were under pressure
after ratings agency Standard & Poor's revised their credit
outlook down to "negative" from "stable."
    The revised outlook on the companies comes after debt-laden
state oil firm Pemex           as well as the sovereign outlook
for Latin America's second largest economy were also revised to
"negative" by S&P.
    Moody's warned that rising crime will hurt corporate profits
in the country over the next 12 to 18 months, raising serious
questions about the health of the economy.
    "We suspect Mexico will be downgraded, but it will be a slow
process ... more likely for 2020," said Gustavo Rangel, ING's
chief economist for Latin America. 
    The primary ratings risk for Mexico comes from the mounting
debt of Pemex, which was downgraded two notches by Fitch in late
January to their lowest rung of investment grade.
    "It is overburdened. Hard for us to see a solution that
makes Pemex a viable company," Rangel added.
    The country's peso, however, shrugged off the
negative sentiment on ratings, edging 0.2 percent firmer.
    Mexican President Andres Manuel Lopez Obrador hit back on
Tuesday at ratings agencies saying they were punishing Mexico
for previous "neo-liberal" policies.
    Chile's peso rose 0.4 percent tracking a gain in the
price of copper, the country's top export, while shares
on the IPSA index were marginally lower. 
    Colombia's peso weakened, while local stocks
hovered around three-month highs, with energy firm Ecopetrol SA
 riding oil prices higher. 
  Key Latin American stock indexes and currencies at 1730 GMT:
 Stock indexes                   Latest        Daily
 MSCI Emerging Markets              1,055.41     0.17
 MSCI LatAm                         2,775.58     0.01
 Brazil Bovespa                            -        -
 Mexico IPC                        42,313.65    -0.25
 Chile IPSA                         5,244.45     0.07
 Argentina MerVal                          -        -
 Colombia IGBC                     12,366.14      0.1
 Currencies                      Latest        Daily
 Brazil real                               -        -
 Mexico peso                         19.2680     0.21
 Chile peso                           657.25     0.39
 Colombia peso                       3100.67    -0.22
 Peru sol                              3.311    -0.03
 Argentina peso (interbank)                -        -

 (Reporting by Agamoni Ghosh, editing by G Crosse)
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