The Latin American Emerging Market Update

The opportunities in emerging markets are still presenting themselves today, so much so that Barclays Capital believes that the Latin American countries are the perfect choice for investors looking to invest in emerging markets. They think that the Venezuelan GDP will grow 6% next year. Emerging Market ETFs saw a gain 0f 10% for the first quarter of the year. This is just one example of a market that interested investors can start to look at. The reason that Latin American markets are prime for investment is that many are coming out of recession and can be bought cheap.  

Compared to the United States dollar, Latin American currencies saw an increase showcasing their continued growth. Higher oil prices on exports are just one factor driving increased currencies, with Mexico’s peso increasing .2%. Pemex, a leading oil exporter from Mexico, fueled the increase by stating that it was going to triple the number of wells it would drill this year to increase crude output and fight against the declining production that the country has been facing. Mexican stock also increased 1% thanks to the announcement made by American Movil stating they would acquire 100% of Nextel’s Brazilian operations.

Chile’s peso rose .4% because of higher copper prices, and their stock reached a new high-point since March 2010 in part due to CAP, a steel producer in the country doing well. Chile and Mexico weren’t the only countries that say a gain on their currency with Colombia’s peso increased marginally as barrel prices on oil increased.

Latin American stocks increased by 2.5%, the best the MSCI has seen since January 2nd. Brazil has seen a huge gain this week with their shares increasing 2.7% and the real finishing up 2.4%. Those that want to start somewhere with promise can look toward that country and even to Brazil. Bozidar Jovanovic, a strategist with Bank Leumi, stated that “…Brazil is an opportunity,” and that interested parties should consider pursuing it. Brazil has seen a huge gain this week with their stocks increasing 2.7% and the real finishing up 2.4%.

The increase is a result of members in the government continuing to try to pass pension reform in the country that would lower the age for retirement and help bring financial stability to the country. Another factor that contributed to the country’s gain was the reported profit that Eletrobras had. The country-run electric company stated they had a profit of $3.02 billion, a sharp pivot from last year. Vale, the iron ore miner in Brazil, also noted a gain of $3.786, helping boost the index.

Argentina’s Merval stock also saw a 2.3% increase this week, and Mexico’s IPC closed .7% higher.  Overall, Latin American emerging markets are a great opportunity for investors to consider. They are being sold cheap and have a positive turnover.

Share this story