EMERGING MARKETS-Brazil real hits two-month high on bets of corporate inflows

SAO PAULO, July 20 (Reuters) - The Brazilian real strengthened to a two-month high on Thursday as traders bet on stronger capital inflows in coming weeks amid a batch of corporate listings. Grupo Carrefour Brasil SA priced Brazil's largest initial public offering in four years earlier this week, totaling 5.12 billion reais ($1.64 billion). Traders say demand is strong for an offering of Brazilian depositary receipts in Colombia-based pharmaceutical firm Grupo Biotoscana SA, with IPOs for renewable power firm Omega Geração SA and reinsurer IRB Brasil Resseguros SA in the pipeline. Brazil's currency firmed 0.4 percent to 3.13 to the dollar, leading gains in Latin America and rising for the fifth straight trading day. "Without much news on the political side, the market turns speculative and it would not surprise me if we saw it breaching the 3.10 threshold," MultiMoney brokerage head of currency trading Durval Correa said. Over the last two months, the Brazilian real rebounded from its weakest levels in five months as fears eased that a political crisis ensnaring President Michel Temer could derail the implementation of his reform agenda. Other Latin American currencies were mostly stronger, with the Mexican peso hovering near 14-month highs. Standard & Poor's decision to raise its outlook for Mexico's sovereign rating, as well as a Reuters report detailing an aggressive timetable for trade talks between Mexico, the United States and Canada, have supported demand for the peso.

Brazil's benchmark Bovespa stock index seesawed in afternoon trading as traders avoided making big bets at the start of the second-quarter corporate earnings season, which gathers steam next week. Shares of homebuilder Cyrela Brazil Realty SA rose 2.3 percent to the highest in two months, leading gains on the index, after reporting a 35 percent jump in second-quarter net sales. "We believe sales in the mid/high-end segment should remain weak for a while, explaining our increased caution on the segment. Having said that, we also think Cyrela is the name to surf a potential rebound in sales," Banco BTG Pactual analysts wrote in a note to clients. Shares of Carrefour Brasil were nearly flat on their market debut after falling as much as 4.3 percent from their IPO price earlier in the day. The listing priced at the bottom of a suggested price range, with fund managers reluctant to bid at higher prices due to a lack of clear competitive advantage against rival GPA SA .

Key Latin American stock indexes and currencies at 1710 GMT:

Stock indexes Latest Daily YTD pct pct

change change

MSCI Emerging Markets 1,060.99 0.08 22.95 MSCI LatAm 2,740.27 0.34 16.68 Brazil Bovespa 65,056.10 -0.19 8.02 Mexico S&P/BVM IPC 51,184.11 0.19 12.14 Chile IPSA 5,028.39 -0.18 21.13 Chile IGPA 25,110.71 -0.16 21.11 Argentina MerVal 21,583.76 0.62 27.58 Colombia IGBC 10,880.35 -0.95 7.43 Venezuela IBC 131,324.09 0 314.20 Currencies Latest Daily YTD pct pct

change change

Brazil real 3.1349 0.44 3.65 Mexico peso 17.5070 0.25 18.49 Chile peso 651.4 0.32 2.96 Colombia peso 2,999.46 0.12 0.07 Peru sol 3.239 0.06 5.40 Argentina peso (interbank) 17.1450 0.09 -7.41 Argentina peso (parallel) 17.75 0.39 -5.24

($1 = 3.1309 reais)

(Reporting by Bruno Federowski; Additional reporting by Claudia Violante; Writing by Bruno Federowski; editing by Diane Craft)