Gruma SAB, the world’s biggest tortilla maker, and other Latin American companies that sell products in Venezuela tumbled in stock trading today after the country devalued its currency by almost a third.
Gruma fell as much as 5 percent in Mexico City trading while Masisa SA, Chile’s biggest maker of wood panels, dropped 4.2 percent in Santiago. Buenos Aires-based Arcos Dorados Holdings Inc., the biggest franchisee of McDonald’s Corp. restaurants in South America, fell 3.5 percent in New York after Morgan Stanley said in a report that Venezuela accounts for 18 to 19 percent of operating income.
Venezuela said Feb. 8 it will weaken the bolivar by 32 percent, the fifth devaluation in nine years. That may cut into income for companies that sell food and consumer goods in Latin America’s fifth-biggest economy, as they translate profit back into their home currencies.
Source: Bloomberg. Read full article. (link)