Top Stories
Top Stories

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

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

pct change

MSCI Emerging Markets 1,055.41 0.17MSCI LatAm 2,775.58 0.01Brazil Bovespa - -Mexico IPC 42,313.65 -0.25Chile IPSA 5,244.45 0.07Argentina MerVal - -Colombia IGBC 12,366.14 0.1Currencies Latest Daily

pct change

Brazil real - -Mexico peso 19.2680 0.21Chile peso 657.25 0.39Colombia peso 3100.67 -0.22Peru sol 3.311 -0.03Argentina peso (interbank) - -

(Reporting by Agamoni Ghosh, editing by G Crosse)