SEATTLE — With the promise of new stimulus packages in Japan, stocks and emerging markets in Latin America gained extreme momentum. The Japanese Prime Minister, Shinzo Abe, implemented these economic measures in the hopes of pointing investors toward assets with higher risk. This move translated into an upswing for local and regional economies in Latin America.
For emerging markets in Latin America, this upswing means that investors are looking to these markets as outlets to increase their yield. Namely, Colombia and Argentina appear as the two most promising emerging market countries.
On the other hand, although one may believe that the Brazilian Real remains relatively unchanged, in reality the currency has actually dropped. The central bank intervened to lower the currency in response to the upward swing of Latin American stocks. Compared to other emerging markets in Latin America, Brazil can expect less attention, save for a few companies and industries.
Over the past few years, Brazil’s growth has slowed, despite its status as the largest economy in Latin America. With a lot of international pressure and internal imbalance, (the effects government involvement in stock market decisions) it will take time for Brazil to see true growth.
Therefore, as an emerging market, Brazil may not return the high yield that investors look for when they take big risks. For this reason, Colombia and Argentina are extremely valuable. Despite the trouble within its government, Colombia has had the most consistent growth among other emerging markets in Latin America.
Companies like Morgan Stanley pay special attention to the crests and troughs of the economic cycles of emerging markets. Morgan Stanley Capital Investment (MSCI) analyzes data from countries all over the world, in order to keep track of the global markets. MSCI is highly trusted by Wall Street and big players in international finance.
With the analysis that emerging markets in Latin America are on the upswing, research firms have made countries, such as Colombia, a target for global investment.
– Connor Borden