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EMERGING MARKETS-Turkish lira slides 6%; Brazil mall operators jump

EMERGING MARKETS-Turkish lira slides 6%; Brazil mall operators jump

reuters.com · 12/29/2021 09:35
EMERGING MARKETS-Turkish lira slides 6%; Brazil mall operators jump

By Susan Mathew

- Turkey's lira slid another 6% on Wednesday, and Brazil's real and the Colombian peso also fell, while shares in Brazilian mall operators BR Malls and Aliansce Sonae and BR Malls jumped on a possible tie-up.

The lira TRY= fell for a third straight session, to around 12.65 to the dollar at 1424 GMT. It was about 16% down on the week, after surging more than 50% last week from record lows of 18 per dollar. nL8N2TE0QA

Worries about politically driven unconventional Turkish central bank policies have hammered the currency this year. In a Reuters poll, annual inflation was expected to exceed 30% this month, while the benchmark interest rate has been cut to 14%.

Implied volatility gauges held near record highs hit in recent days, data from Fenics showed. TRY1YO=FN, TRY3MO=FN, TRYSWO=FN

While Turkey should be of little importance for foreign institutional equity investors, accounting for only 0.2% of the MSCI EM index, Hasnain Malik, head of equity research at Tellimer, said its average daily value traded was close to $2bn over the last six months, placing it above Saudi Arabia, South Africa and Russia.

Turkish stocks .XU100, which had scaled all-time highs this month, were about 21% below those levels on Wednesday. On the day, they were up about 2%, while on the year they have gained 28%.

In Latin America, a steady dollar and higher copper prices lifted Chile's peso CLP= 0.7%. Chile's central bank had considered hiking the interest rate by as much as 150 basis points this month, before deciding to raise by 125 bps, minutes showed. MET/L

Mexico's peso MXN= firmed for the fifth time in six session, while Brazil's real BRBY fell 0.3%, with eyes also on month-end derivative settlements that could turn the direction of the currency.

Falling oil prices weighed on Colombia's peso COP= and Latam oil producers such as Petrobras PETR4.SA. O/R

Courts in four Brazilian states have suspended a 50% hike in natural gas prices planned by Petrobras, likely kicking off an intense legal battle between the state-run enterprise, the distributors that buy its fuel and various political authorities. nL1N2TD1HT

But losses on Sao Paulo's Bovespa stocks index .BVSP were capped by BR Malls BRML3.SA, whose shares rose 2.7% after it confirmed that Aliansce Sonae Shopping Centers ALSO3.SA had contacted it to evaluate an acquisition or tie-up.

A tie-up would create the biggest mall operator in Brazil. Aliansce shares were up 3.3% nL1N2TE02B


Key Latin American stock indexes and currencies at 1407 GMT:


Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1220.46

-0.54

MSCI LatAm .MILA00000PUS

2109.10

-0.12

Brazil Bovespa .BVSP

104618.30

-0.23

Mexico IPC .MXX

-

-

Chile IPSA .SPIPSA

4257.15

-0.29

Argentina MerVal .MERV

-

-

Colombia COLCAP .COLCAP

1408.20

0.25




Currencies

Latest

Daily % change

Brazil real BRBY

5.6543

-0.28

Mexico peso MXN=D2

20.5664

0.37

Chile peso CLP=CL

848.9

0.68

Colombia peso COP=

4011.6

-0.15

Peru sol PEN=PE

3.9446

0.07

Argentina peso (interbank) ARS=RASL

102.6700

-0.05



(Reporting by Susan Mathew in Bengaluru; additional reporting by Karin Strohecker in London.)

((susan.mathew@thomsonreuters.com; +91-80-6287-2704;))