UPDATE 1-Colombia says carries out $100 mln debt conversion

Reuters: [2008-05-17 01:10:00]

(Adds details throughout)

BOGOTA, May 16 (Reuters) - Colombia has carried out an operation to convert $100 million in foreign debt to local peso obligations in the first such measure to take advantage of the strong currency, the finance ministry said on Friday.

Colombia earlier this month it plans to eventually convert all of its $20 billion foreign currency debt into pesos through a serious of hedge operations as the peso soars.

The government has said the operations would start with up to $2 billion in its World Bank obligations. The Colombian peso <COP=RR> has strengthened around 10 percent against the U.S. dollar over the last 12 months. (Reporting by Patrick Markey in Bogota; Editing by Jan Paschal, Gary Hill)

((pat.markey@reuters.com; Tel: +57-1-634-4090; Reuters messaging: pat.markey.reuters.net@reuters.com))

Keywords: COLOMBIA/DEBT

*TOP NEWS* Canada

Reuters: [2008-05-16 23:20:00]

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> Commodities power Toronto stocks to record close    [nN16441243] 
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Chile stocks rise on ADR purchases, peso firms

Reuters: [2008-05-16 23:06:00]

SANTIAGO, May 16 (Reuters) - Chilean stock indexes closed higher for a third session on Friday, boosted by electric utility Enersis and dominant bank Santander.

The peso rose for a third day against the dollar even though the central bank continued its daily purchase of greenbacks.

The all-market IGPA index <.IGPA> closed 1.15 percent higher at 13,880.58 points, while the blue-chip IPSA index <.IPSA> advanced 1.55 percent to 2,963.84 points.

Traders said indexes were pushed higher after American Depositary Receipts for regional energy group Enersis and for Banco Santander Chile were recommended on a televised investment show in the United States.

"The push came this morning from abroad. Local trade has been thin," one trader said. "Investors began buying ADR shares in Enersis and Santander, and some other big stocks latched on. There really isn't any local news to speak of."

Of Chile's 40 blue-chip stocks, 21 closed higher, 16 fell and three were unchanged.

Gains were led by Endesa Spain's <ELE.MC> regional utilities, as regional investment arm Enersis <ENE.SN> jumped 4.89 percent and generating subsidiary Endesa Chile <END.SN> rose 3.88 percent. The two issues are weighted at about 15 percent of the IPSA.

Leading bank Santander Chile <STG.SN> surged 5.26 percent to 24 pesos a share.

Other gaining shares included chemical and fertilizer exporter SQM <SQM_pb.SN>, up 4.04 percent, and iron ore exporter CAP <CAP.SN>, with an advance of 3.78 percent.

Traders said next week local investors will continue monitoring foreign and U.S. markets.

The Chilean peso <CHILJ> <CLP=CL> edged 0.15 percent higher to close at 466.20/467.50 per dollar compared with Thursday's close at 466.90/467.20.

The central bank on Friday continued with its daily purchase of $50 million on the currency exchange as part of an $8 billion intervention to curb the strength of the peso against the greenback.

Chilean inflation-adjusted five-year central bank bond yields <CLBCU5Y=RR> ended at 2.89 percent from the prior session's close at 2.99 percent, on stronger demand and expectations for higher inflation, traders said. (Reporting by Lisa Yulkowski; Editing by Leslie Adler)

((lisa.yulkowski@reuters.com; +56-2-370-4290))

Keywords: MARKETS CHILE/

Brazil stocks surge, real gains to Jan 1999 high

Reuters: [2008-05-16 23:06:00]

(Updates to close)

By Elzio Barreto

SAO PAULO, Brazil, May 16 (Reuters) - Brazil stocks surged to a record on Friday as mining company Vale, local steelmakers and state-controlled Petrobras took a boost from a commodity rally, while the national currency gained to its strongest level since January 1999.

The Bovespa index <.BVSP> of the Sao Paulo stock exchange jumped 1.78 percent to 72,766.93 points, passing a previous record set on Thursday. The index has gained nearly 14 percent in 2008 and broken successive records as investors bet a booming economic expansion in Brazil will boost corporate profits.

Steelmakers Usiminas, Gerdau and CSN were among the biggest gainers on Friday, surging more than 2 percent after the local industry association raised its sales forecast for the year.

The Brazilian real <BRBY> strengthened 0.79 percent to 1.642 per U.S. dollar, its highest level since closing at 1.58 on Jan. 20, 1999 less than a week after the government let it float freely against the dollar.

Brazil, which had a controlled foreign exchange rate regime for years, let the real trade freely against the dollar on Jan. 15.

The currency, which rallied 20 percent last year, has gained 8.22 percent in 2008. It may rally further, toward 1.6 per dollar as investors buy local securities ahead of an expected credit upgrade by Fitch Ratings, said Joao Medeiros, a partner at Brazil's biggest interbank currency brokerage Pioneer. Dollar inflows from exporters and foreign stock investors have also been strong, he said.

"I see nothing but upward pressure on the real. All you see are dollar inflows," said Medeiros. "Exporters have been selling an amazing volume of dollars. Inflows into stocks continue to charge ahead also."

Interest-rate futures <0#DIJ:> on the BM&F commodities and futures exchange fell the second day in a row on expectations that the government may extend tax breaks to key foodstuffs to curb resurgent inflation.

At the stock exchange, steel shares rallied after the local industry association raised its sales growth forecast for the year to more than 13 percent from 10.7 percent, citing red-hot domestic demand for automobiles and appliances.

Gerdau <GGBR4.SA>, Brazil's biggest producer of long-rolled steel, jumped 5.07 percent to 80.04 reais. Usiminas <USIM5.SA> climbed 4.13 percent to 93.2 reais and CSN <CSNA3.SA> rose 2.59 percent to 83.3 reais.

Mining giant Vale <VALE5.SA>, the second most heavily weighted stock in the index, rose 3.13 percent to 58.62 reais, benefiting from a surge in copper and other industrial metals.

State-run energy company Petrobras <PETR4.SA>, the heaviest weighted stock in the Bovespa index, also helped to buoy the market. Its shares rose 2.21 percent to 48.15 reais after world oil prices extended a record-setting streak near $127 a barrel.

The jump in oil prices weighed on airline shares, with TAM Linhas Aereas <TAMM4.SA> falling 3.3 percent to 36.60 reais and Gol Linhas Aereas <GOLL4.SA> sliding 1.67 percent to 27.14 reais. ((elzio.barreto@thomsonreuters.com; +55 11 5644-7725; Reuters Messaging: elzio.barreto.reuters.com@reuters.net)) Keywords: MARKETS BRAZIL/

Canadian dollar nearly flat ahead of long weekend

Reuters: [2008-05-16 23:02:00]

    * Canadian dollar closes flat, but up on week 
    * Lofty oil prices lend support to Canadian dollar 
    * Bond prices lower across the curve 
    
    By John McCrank 
    TORONTO, May 16 (Reuters) - The Canadian dollar was flat 
against the U.S. dollar on Friday in quiet trade ahead of 
Canada's Victoria Day long weekend, but it did record its 
second straight weekly gain as the commodity-linked currency 
drew support from robust oil prices. 
    Canadian bond prices, with no key economic data to 
consider, drifted lower along with the U.S. market. 
    The Canadian currency closed at US$1.0002, valuing a U.S. 
dollar at 99.98 Canadian cents, up a bit from US$1.0000 at 
Thursday's close. 
    The currency rose 0.6 percent this week after a gain of 1.4 
percent last week. 
    Early in the session, the Canadian dollar rose to US$1.0049 
as U.S. crude oil <CLc1> touched a record high near $128 a 
barrel. See [ID:nN16574659]. But the currency fell back to 
parity as oil prices eased. 
    Canada is a major oil producer and exporter and its 
currency often follows prices for the commodity, a trend that 
started to regain momentum in recent weeks. 
    While the Canadian dollar was pretty much unchanged versus 
the greenback, it fell against most other major currencies, in 
tandem with the U.S. dollar, said Camilla Sutton, currency 
strategist at Scotia Capital. 
    That was due to weak U.S. consumer confidence data, which 
raised some concerns about U.S. second-quarter economic growth. 
The United States is by far Canada's biggest trading partner. 
    Next week the slate of Canadian economic data picks up with 
a slew of reports that include April inflation data on 
Wednesday and March retail sales on Thursday. 
    "Next week the retail sales data will be more important 
that the CPI, just because I think CPI will show what we all 
know already, which is that inflation pressures in Canada are 
really very moderate," Sutton said. 
    
    BONDS TILT LOWER 
    Canadian bond prices tilted lower in quiet trade as the 
bond market closed early for the long weekend. 
    "We've got really just the mildest of selloffs," said Eric 
Lascelles, chief economics and rates specialist at TD 
Securities. 
    "But we do have some pretty big numbers next week and I 
suppose there will be some room for Canadian bonds to rally." 
    The two-year bond was down 6 Canadian cents at C$101.87 to 
yield 2.798 percent. The 10-year fell 13 Canadian cents to 
C$103.25 to yield 3.575 percent. 
    The yield spread between the two- and 10-year bonds was 
77.7 basis points, down from 78.6 at the previous close. 
    The 30-year bond dropped 1 Canadian cent to C$116.29 for a 
yield of 4.041 percent. In the United States, the 30-year 
Treasury yielded 4.577 percent. 
    The three-month when-issued T-bill yielded 2.61 percent, 
down from 2.63 percent at the previous close. 
 (Editing by Peter Galloway) 
 ((john.mccrank@thomsonreuters.com; +1 416 941 8083; Reuters 
Messaging: john.mccrank.reuters.com@reuters.net)) 
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Keywords: MARKETS CANADA DOLLAR BONDS