Thursday , May 26 2022

What do managers recommend to invest in Latin America?


expert opinion

Worldwide experts believe that there are interesting purchasing opportunities in many countries in the region on current values

Despite the complex situation experienced by markets worldwide in recent weeks, managers continue to see investment opportunities in Latin America and analyze the differences in relation to the other region. come to a prominent: Asia.

Santander AC. "Latin America has grown, since 2000, an annual average of 2.5%." Another thing is the stock market. The annual composite product, the MSCI in Latin America's compared to the same Asian, is the same (just over 9.1%), "says Luciano Buyo, senior manager of equity investment funds Latino America, clearly The investor's performance was very attractive over the past 30 years, "a positive message that will follow next 30".

Pictet. "Asia will continue to grow more, especially thanks to China's presence, but we continue to attract Latin America for the need to diversify," said David Chatterjee, the world's leading head of markets come to prominence at Pictet AC.

"The Asian market has a great relationship between them, which means, if China is growing faster, this will affect Japan or South Korea," said the expert.

Allianz Global Investors. "We see less volatility in China, where there are doubts about its growth", Alejandro Velasco, vice president of fixed income for emerging markets at Allianz Global Investors, states "the firm fundamentals of American Ladies."

In terms of fixed income, Asia is the big publisher of corporate debt, in his opinion, something "difficult to absorb it by investors"; however, Latin America has the other route, as these bond bonds announcements are shrinking.

Income 4. Alejandro Varela, a manager specializing in Latin America of Renta 4, argues that the region "presents strong points" as the "way in which financial policies are handled". "Turning liberalization will happen" and at present, "the real opportunities" will be seen there, the specialist points indicate.

Brazil to Mexico

From Santander AC they see "value" in the future, although they suggest that the country "should reduce the financial costs or infrastructure". In relation to political power and the new Executive led by Jair Bolsonaro "have the opportunity to improve the economy with concrete measures."

As for Mexico, "it's still an anchor for investors in the" with "independence" region from its central bank that has been "caring for years".

"Perhaps this is the time when interest rates are going to be in a relatively low area for a longer period of time," said Pictet AM. However, it highlights the "high political noise that exists around these two countries." After the elections, "Brazilian Government has much to do to improve the financial situation, where many do, and in Mexico we still see a lot of noise, will keeps instability at very high levels too during the December period ".

In the fixed income market, Brazil and Mexico are also the main markets in the region. In this sense, Velasco recognizes that what is happening today's bonds "is a risk of operating in Brazil". To it, "the Government is committed to the reforms that will help it in the economic growth, and we will monitor these measures, including pension reform."

Regarding Mexico, "there has been some change in government trend." Up to a few weeks ago, there was a lot of optimism in the markets thanks to the messages sent by the AMLO Executive, but now we really see what happens after many barriers. in recent weeks (such as canceling the airport project in Mexico City), which causes uncertainty and repayment of debt prices. "

Andrés Government López Obrador Government will take office in early December, despite the elections being held in July.

Varela, on the other hand, recognizes that within the Latin American Renta fund portfolio "80% or almost 90% of it include Brazil and Mexico. " "We have more confidence in Brazil, a period of opportunity opens with a 1% growing economy this year and that can reach 2% in 2019. The suspicion, however, raises around Mexico where the last government decisions have frustrated what hopeful prospects were. More security is now near the Bulls than in Mexico. "

Moreover, Velasco wanted to make it clear that the government that AMLO will assume will do so with a "very positive legacy".

Other opportunities in Latam

Luciano Buyo emphasizes, first of all, Argentina as one of the countries where there are also investing opportunities, such as utilities, with "physical assets" that can be "touched". On the other hand, Chile stands out "in its eating sector". This is the sector that the specialist highlights as one of the drivers that will move the American-American economy in the years ahead. "After the first wave led by companies such as Petrobras, other sectors will emerge, such as the industrial and consumer sectors."

Regarding Argentina, the Pictet manager has some doubts about the current situation in the country. "We have not yet invested, although we see some recovery," he recognizes. "For the rest of the region, we are looking at sectors such as the Brazilian consumer sector, and also Banco do Brasil, which is also associated with the use".

Renta 4 claims that they have "a lot of pressure in the financial sector, with very reasonable multiples of 10 times, so that they achieve ROEs by 18%." The low penetration of the financial sector allows much greater potential in the region. In addition, it highlights, in line with the rest of the experts, the evolution of the use, thanks "to the middle class increase". "And we are also committed to large mining companies, focusing on the recovery of lithium or copper."

In the debt market, Alejandro Velasco says that he has locked "in a defensive way that he discovered outside of Mexico and Brazil, as in the Andean region that tends to be more defensive, in Chile and Peru. " On the other hand, the expert recognizes that "the result seen in the elections held has been a continuation, in Colombia there are also opportunities." "Nope also likes the telecommunications sector, as we see many opportunities to increase the usage of data in the region."

The relationship with raw materials

"We have different degrees of relationship with goods such as a region, China is really slow down and that can have an impact," said Santander AM, stating the measures adopted by governments such as the Mexican government . who tried to unconnect their accounts with the price of oil.

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