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Brazil’s Bovespa drops 1pc on pension jitters

Brazil’s Bovespa drops 1pc on pension jittersSAO PAULO: Brazil’s benchmark Bovespa index led declines among Latin American equities markets on Tuesday, falling more than 1 percent amid persisting uncertainty over the passage of pension reform legislation seen as key to the nation’s fiscal health.

Speaking to journalists in Argentina late on Sunday, President Michel Temer said a vote on streamlining Brazil’s social security system could be delayed until early 2018 as the government struggles to gather support among lawmakers. On Monday, Carlos Marun, a key lawmaker in Temer’s Brazilian Democratic Movement Party, told journalists the government still lacked 40 to 50 votes.

An early 2018 vote would fall dangerously close to parliamentary and presidential elections, making approval of the unpopular measure less likely.

“If it’s not this year, it will be in the beginning of next year,” Temer said, according to a transcript of a news conference.

In separate comments on Tuesday, Rodrigo Maia, the speaker of Brazil’s lower house, said he was planning to put the pension bill to a vote next week. He added that it was unclear if the government had the support needed to pass the bill and send it to the nation’s senate.

The Bovespa fell more than 1.2 percent in morning trading, but firmed slightly after Maia’s comments. By midday the Bovespa was off 1.01 percent, while the nation’s real currency was down 0.58 percent.

Among the nation’s top performing stocks was private education company Kroton Educacional SA, which rose 2.4 percent after previewing an aggressive expansion plan at an investors’ day on Monday.

Other markets in Latin America were relatively quiet on Tuesday.

Colombia’s peso was the biggest mover on currency markets, dropping 0.58 percent after Standard & Poor’s lowered the country’s long-term foreign currency rating to BBB- on Monday, citing the its weakened policy flexibility.

Copyright Reuters, 2017

Source: Brecorder.com

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