Amid record global inflation and fears of a recession in the U.S., investors are taking a closer look at the markets of Latin America.
The relative attractiveness of the region’s equities has been building over the past 12 months due to two main factors, according to Dubravko Lakos-Bujas, head of global equity macro strategy and LatAm stock research at JPMorgan Chase & Co. The first is the “the phase-out of the exceptionally strong moment for U.S. equities following a massive price correction in growth stocks and the outperformance in the value sector. The second [is the] the positive impact of a trade shock, led by higher commodity prices.”
For the first three quarters of 2021, Latin America benefited from global market liquidity, but at the end of the year “things started to get a little more complicated,” according to Carlos Sequeira, head of research at BTG Pactual.
As inflation kicked in and equity markets dried up, investors began looking into opportunities around the globe, especially to countries that are commodity exporters like Brazil, Chile, Peru, and Colombia.
“This has attracted attention back to these countries, and we have pretty good inflows of money coming from international investors, especially into those countries,” Sequeira said, adding that Mexico is not experiencing this lift due to its lack of commodities and close ties to the U.S.
For insights like these, the buyside has once again selected BTG Pactual as the region’s top research team, according to Institutional Investor’s 30th annual Latin America Research Team survey.
To select the members of our 30th annual Latin America Research Team, Institutional Investor solicited opinions of directors of research and investment professionals at asset management firms with significant securities holdings in Latin America. We received responses from more than 630 individuals at 408 firms. The names of individuals surveyed are kept confidential to ensure their continuing cooperation.
This year, participants rated their top firms in each sector and then separately rated individual analysts or economists/strategists at those firms to create two distinct rankings for each sector. A numerical score was produced by weighting each vote based on the respondent’s Latin American commission range and the average rating awarded. This created the Commission-weighted Leader table rankings. The same scores weighted by each voting firm’s Latin American equity assets under management generated the AUM-weighted tables.
Using those scores, ranks were determined. Firms/analysts were designated runners‐up when their scores came within 35 percent of the third-place scores. For the analyst rankings, individuals, who switched firms after February 14, 2022, are cited at their previous organizations.
In addition, Latin America country research sectors were aggregated with country sales, corporate access, and trading & execution to create the overall Best Country Broker leader tables weighted by commissions.
Voters, in the survey, must meet eligibility requirements, and winners must achieve a minimum vote count. All ballots are subject to review by our Research Operations Group.
The 2022 Latin America Research Team was compiled by Senior Project Manager Tucker Ewing and Associate Project Managers Denise Best and Xiao Lu.