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2015 All-Latin America Research Team: Equity Strategy, No. 1: Guilherme Paiva & team

< The 2015 Latin America Research TeamGuilherme Paiva & teamMorgan StanleyFirst-Place Appearances: 8

Total Appearances: 15

Team Debut: 1994

Morgan Stanley’s regional equity strategists are “the best at anticipating chains of events and recommending positioning in Latin America,” observes one money manager. “Their material leads the conversation, and a few months later, you will see the topics Morgan Stanley brought up being addressed elsewhere.” This foresight helps the firm secure its fourth straight No. 1 finish on this roster. Leading the team is New York–based Guilherme Paiva, 40, who also oversees troupes that win runner-up positions for their coverage of Brazil and Argentina, the latter with Cesar Medina. He and his colleagues covering this space — from Mexico City, New York and São Paulo — favor such countries as Chile and Mexico, “which have done the homework and thus rebalanced or are at an advanced stage of rebalancing their economies,” says Paiva. “The key issue is the pace and strength of their current economic expansions vis-à-vis what local equity markets are pricing in in terms of earnings growth.” Specifically, in Mexico they are proponents of companies leveraged to U.S.-linked manufacturing through real estate and construction; reform-minded state-owned enterprises, via industrials; and consumer names that tap into local growth, through the banking and media sectors. Chile, Paiva believes, is “one of the most interesting markets in the region.” The nation’s current-account deficit has shrunk from more than 4 percent of gross domestic product as recently as the first-quarter of 2013 to less than 1 percent in the final three months of last year, he explains, and year-to-date economic data through mid-June showed accelerating growth. In addition, Chilean stocks are attractively valued, the strategists believe. They are, however, less sanguine about the prospects for Brazil, Colombia and Peru, which serve as examples of countries that have made “little or limited progress in rebalancing their economies,” says Paiva.


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