Latin American Company Stocks Fall Following Venezuelan Currency Devaluation
World's largest tortilla maker among those affected
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.
