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Argentine stocks beat other Latin American markets in 2010

Submitted by Rudy Martin on Tue, 12/28/2010 - 14:00

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Dec 24, 2010 08:31 am | Rudy Martin

Argentina scores a big win

Weekly Update | December 24, 2010

Dear Subscriber,

Argentina is attracting back international investors through its debt restructuring programs and growth. Stocks there have gained an average of 50%, the best performance of the major Latin America countries, so far this year. This week, the government again offered its creditors long-term government securities in exchange for $6.1 billion of debt.(It completed a similar program worth $12.2 billion in June). Along with better access to debt markets, the country's fundamentals should continue to improve in 2011. The central bank forecasts the economy will grow 9 percent this year, the fastest pace since 2005. Despite the upcoming presidential elections, Argentina's recovery will still benefit from higher exported commodity prices and strong growth in Brazil, the main destination for the country’s products.

On top of this, higher infrastructure investment will have an impact on the Argentine stocks in our portfolio.

Top performers over the last week were:

YPF S.A. (NYSE:YPF) +17.1%

Brasil Telecom S.A. (NYSE:BTM) +8.9%

Cemex SAB de C.V. (NYSE:CX) +5.6%

Grupo Financiero Galicia S.A. (NasdaqSC:GGAL) +5.4%

Cosan Limited (NYSE:CZZ) +5.3%

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Infrastructure spending still lags in Latin America.

Dec 17, 2010 10:02 am | Rudy Martin

Brazil's economic stimulus for 2011

Weekly Update | December 17, 2010

Dear Subscriber,

With an eye on hosting upcoming global sporting events such as the 2014 FIFA World Cup and 2016 Olympic Games in Rio, the Brazilian government announced several measures to encourage infrastructure investments. The measures include funding to purchase corporate bonds, massive tax cuts to investors in bonds used to raise funds for infrastructure projects and a partial rollback of taxes on capital inflow from overseas. Brazil’s investment in its infrastructure has lagged that of emerging market leaders. In terms of investment-to-GDP ratio, Brazil averaged 17% over the past five years far less than China (44%), India (38%) and Russia (24%).

Obviously this higher investment will have an impact on the Brazilian economy. Stay tuned to see how Brazil's government finances this relative to its current revenue stream.

Top performers over the last week were:

NII Holdings (NasdaqGS: NIHD) +8.9%

Braskem (NYSE:BAK) +6.3%

Companhia de Saneamento Basico do Estado de São Paulo (NYSE:SBS) +4.9%

Companhia de Bebidas das Americas (NYSE:ABV) +4.8%

Industrias Bachoco, S.A.B. de C.V. (NYSE:IBA) +4.3%

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