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EMERGING MARKETS-Brazil currency, shares rise on pension overhaul proposal

Sruthi Shankar

(Updates prices; adds details on Argentina's markets) June 13 (Reuters) - The Brazilian real firmed and stocks climbed on Thursday, as investors welcomed a report on the government's proposal to overhaul the country's pension system. The real rose about 0.4% while Sao Paulo-listed stocks also gained 0.4% to touch a near three-month high after Brazil's congressional pension reform bill coordinator Samuel Moreira said the proposed changes would generate savings of 913.4 billion reais ($237 billion) over the next decade.

The committee had targeted savings of between 800 billion and 1 trillion reais through a range of measures, including raising the minimum retirement age and increasing workers' contributions. The bill will now be debated, voted on and sent to the lower house plenary for a vote. If passed in the form Moreira presented on Thursday, it will likely be seen as a success for the administration. The real had risen as much as 0.9% earlier in the session and stocks were up nearly 1%. "All indications suggest that pension reform remains on track and may leave the committee with greater savings than the consensus expected," Dirk Willer, head of emerging market strategy at Citi Research, and Kenneth Lam, an emerging markets FX strategist, wrote in a note. The social security overhaul is a cornerstone of President Jair Bolsonaro's economic agenda, aimed at shoring up dire public finances and restoring investor confidence to kickstart an economic recovery. Most other currencies in the region, including the Mexican , Colombian and Chilean pesos made tepid moves against the U.S. dollar as concerns about U.S.-China trade tensions and the Federal Reserve's upcoming monetary policy meeting remained a focus. The Argentine peso advanced for a third day in a sign of approval from markets after President Mauricio Macri picked a moderate running mate that could broaden his voter base in elections to be held later this year. Argentina's official statistics agency INDEC said consumer prices rose 3.1% in May, in line with a Reuters poll of economists, keeping accumulated inflation in 12 months through May at 57.3%. Among stocks, a more than 2% jump in oil prices helped shares in Brazil's state-run oil company Petróleo Brasileiro SA gain over 1% and boost the Bovespa index. The commodity's price got a boost following a suspected attack on two tankers in the Gulf of Oman near Iran and the Strait of Hormuz, through which a fifth of global crude oil passes. Colombia's local stocks tacked on 0.66%, with energy firm Ecopetrol SA riding on the back higher oil prices . Bank stocks were a drag in Brazil, with shares of Bradesco and Itau Unibanco falling more than 1% on the prospect of higher taxes for financial institutions. Company news drove shares in Brazilian petrochemical producer Braskem, which rose nearly 3% after it said an appeals court overturned a decision blocking dividend payments. Brazilian food processor BRF SA jumped 5% to the top of Bovespa after J.P. Morgan upgraded the company to "overweight" from "neutral".

Key Latin American stock indexes and currencies at 1945 GMT

Stock indexes Latest Daily

pct change

MSCI Emerging Markets 1,021.87 -0.43MSCI LatAm 2,785.63 -0.35Brazil Bovespa 98,741.76 0.43Mexico IPC 43,413.39 -0.88Chile IPSA 5,074.46 0.13Argentina MerVal 40,748.20 -0.45Colombia IGBC 12,314.04 0.8Currencies Latest Daily

pct change

Brazil real 3.8546 0.35Mexico peso 19.1584 0.04Chile peso 696 -0.09Colombia peso 3,263.54 0.06Peru sol 3.33 -0.03Argentina peso (interbank) 43.3000 0.92

(Reporting by Sruthi Shankar in Bengaluru; Editing by Sandra Maler)