Thursday, October 22, 2009

Emerging Markets - Latin America

Discussion on Latin American emerging markets


  1. In early 2009, MSCI Barra classified 22 countries as ‘emerging markets’ – nations currently experiencing rapid business growth and industrialization. Of these 22, five are Latin American (Brazil, Chile, Colombia, Mexico and Peru), and furthermore, the Czech Republic is also featured on the list. Moreover, a Mastercard-compiled ‘Emerging Market Index’ – a list of the 65 most influential cities in emerging economies in 2008 – included fourteen Latin American countries. There is no doubt that overall, Latin American economies are strengthening year on year.

    The current economic climate has placed strain on the market economies of numerous countries worldwide, and Latin American economies are no exception. However, it is a strongly held belief that the debt in emerging markets such as those of Latin America will recover at a much quicker rate than the economies of the developed countries. Reported just last month in the Financial Times, it is claimed that the reasons for this more speedy recovery is because individual Latin American households have less debt, and because the banking system will be able to extend credit to the consumer sooner [Financial Times 4th Oct 2009]. Despite investment in Latin American markets still perhaps being considered riskier than investment in the more developed markets, this risk in turn increases the potential return from investing in emerging markets.

    What’s more, at the recent highly-publicized G20 Summit in the United States, it was announced that Brazil, whose population accounts for almost a third of the entire population of Latin America1, has now exited recession after expanding 1.9% in the second quarter of the current financial year. As other Latin American countries push for the same sort of revival as is currently beginning to be experienced in Brazil, investment in these emerging markets is looking a safer bet than it has in previous years.

    Emerging markets contain 80% of the world’s population, and produce almost 50% of the world’s GDP (Gross Domestic Product), and yet are still vastly under-represented in world stock markets [Times Online 10th Oct 2009]. With statistics such as these, this trend simply cannot continue. Now is a better time than ever for European companies to consider investing in the Latin American markets and their plenitude of products and services.

    1 Latin American population listed as 569million; Brazil population 175million. Source: population statistics, online

  2. go brazil! top emerging market throughout 2025!!!!

  3. I went to CCNLA site and could not find the statistical report for Dominican Republic. Can you recommend a site where I can get that? Also, can you please tell me a prospectus on top investment opportunities in DR?