Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21
Work From Home £10,000 Office Tour – Workspace + Desk Setup 2021 Top Tips - 12th Jan 21
Collect a Bitcoin Dividend Without Owning the King of Cryptos - 12th Jan 21
The BAN Hotlist trade setups show incredible success at the start of 2021, learn how you can too! - 12th Jan 21
Stocks, Bitcoin, Gold – How Much Are They Worth? - 12th Jan 21
SPX Short-term Top Imminent - 12th Jan 21
Is This The Most Exciting Oil Play Of 2021? - 12th Jan 21
Why 2021 Will Be the Year Self-Driving Cars Go Mainstream - 11th Jan 21
Gold Began 2021 With a Bang, Only to Plunge - 11th Jan 21
How to Test Your GPU Temperatures - Running Too Hot - GTX 1650 - Overclockers UK - 11th Jan 21
Life Lesson - The Early Bird Catches the Worm - 11th Jan 21
Precious Metals rally early in 2021 - 11th Jan 21
The Most Exciting Oil Stock For 2021 - 11th Jan 21
Financial Market Forecasts 2021: Navigation in Uncharted Waters - 10th Jan 21
An Urgent Message to All Conservatives, Right-Wingers and Patriots - 10th Jan 21
Despite Signs to the Contrary, Gold Price at or Near Top - 10th Jan 21 -
Ultimate Guide On The 6 Basic Types Of Index Funds - 10th Jan 21
Getting Vaccinated at TESCO - Covid-19 Vaccinations at UK Supermarket Pharmacies and Chemists - 10th Jan 21
Cheers for the 2021 Stock Market and These "Great Expectations" - 9th Jan 21
How to Plan Your Child With Better Education - 9th Jan 21
How To Find The Best Casino - 9th Jan 21
Gold Is Still a Bargain Buy - 8th Jan 20
Gold Price Set to Soar as Hyperinflation Looms - 8th Jan 21
Have Big Dreams? Here's How to Pay for Them - 8th Jan 21
Will the Fed Support Gold Prices in 2021? - 8th Jan 21
Stocks trading strategies for beginners - 8th Jan 21
Who is Buying and Selling Stocks in 2021 - 8th Jan 21
Clap for NHS Heroes 2021 as Incompetent Government Loses Control of Virus Again! - 8th Jan 21
Ultimate Gaming and Home Working PC System Build 2021 - 5950X, RTX 3080, Asus MB - Scan Computers UK - 7th Jan 21
Inflation the bug-bear looking forward through 2021 - 7th Jan 21
ESG ETF Investing Flows Drive Clean Energy to Fresh Highs - 7th Jan 21
5 Financial Market Surprises in 2021 - 7th Jan 21
Time to ‘Reset’ Your Investment Portfolio in 2021? - 7th Jan 21
Bitcoin Price Collapses almost 20% at the start 2021 - 7th Jan 21
Fed Taper Nervous Breakdown - 6th Jan 21
What Will the U.S. Dollar Ring in for 2021? - 6th Jan 21
Stock market frenzy- Ride the bandwagon but be sure to take along some gold coins - 6th Jan 21
Overclockers UK Custom Build Gaming System Review Heat Test and Final Conclusion - 6th Jan 21
Precious Metals Resuming Bull Market, Gold, Silver, GDX Trend Forecasts 2021 - 5th Jan 21
Trump’s Iran-COVID-Gate Anniversary  - 5th Jan 21
2021 May Be A Good Year For The Cannabis / Marijuana Sector - 5th Jan 21
Stock Market Approaching an Important Target - 5th Jan 21
Consumer Prices Are Not Reflecting Higher Inflation; Neither Is The CRB - 5th Jan 21
NEW UK Coronavirus PANIC FULL Lockdown Imminent, All Schools to Close! GCSE Exams Cancelled! - 4th Jan 21
The Year the World Fell Down the Rabbit Hole - 4th Jan 21
A Year Like No Other for Precious Metals… and Everything Else - 4th Jan 21
The Stocks Bull Market is Only Half Completed - 4th Jan 21
An In- Depth Look At Gold Price Trend - 4th Jan 21
Building America Back After a Dark Covid Winter - 4th Jan 21
America's Dark Covid Winter Ahead - 4th Jan 21
Buy a Landrover Discovery Sport in 2021? 3 Year Driving Review - 3rd Jan 21
Stock Market Major Peak in Early April 2021 - 3rd Jan 21
Travel and Holidays 2021 - Flight Knight Cabin Bag Review - 3rd Jan 21
�� Happy New Year 2021 Fireworks and Drone Light Show from London and Sheffied - BBC�� - 2nd Jan 2
The Next IMMINENT Global Catastrophe After Coronavirus - 1st Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Investing in Peru, South America’s Hidden Gem

Stock-Markets / Emerging Markets Apr 08, 2010 - 06:45 AM GMT

By: Money_Morning

Stock-Markets

Best Financial Markets Analysis ArticleMartin Hutchinson writes: When investing in the emerging markets, you need to cast your net beyond the obvious candidates. Granted, China, Brazil and India have emerged to become very attractive investment stories (I don't trust Russia, the fourth and final "BRIC" economy).


But everyone else has heard of them, too, which is why their markets have been bid up very high in the past year. Their prospects remain excellent, but you're paying a lot for them.

From time to time, however, a country that has been off investors' radar screens has a few good years, and begins to creep onto them. In such countries, risk may be high, but values at least remain reasonable.

That's why it might be worth investing in Peru.

When U.S. investors look at the countries of Latin America, they do so with great suspicion - and with good reason.

Mexico has proved to be a sinkhole for U.S. money for two generations. Argentina hasn't been quite as costly for Americans - even with its recent retirement-fund debacle - but only because the Europeans dived in first. Venezuela has been a disaster and even Brazil has proved very disappointing.

Despite that history, Brazil last year proved just about the best place you could have placed your money. And Chile currently appears not only very attractive, but safe. After all, in an era of perpetually rising commodity prices, doesn't it make sense to invest in commodity-producing countries?

That brings us to Peru.

At first glance, Peru looks mired in the category of countries a U.S. investor should avoid at all costs. If three of the top factors to a market's success are "location, location, location," then Peru has a big strike against it, for it's in a bad neighborhood: Two of its neighbors are Bolivia and Ecuador, places where no sane person would invest a penny, given their awful current regimes.

One of Peru's more recent presidents, Alberto Fujimori, who served from 1990 to 2000, is now serving another term - this one a jail term ... of 25 years. And quite frankly, the fact that his daughter, Keiko Fujimori, is currently leading in opinion polls for the April 2011 election doesn't add to one's confidence either. Either Fujimori was unjustly imprisoned - in which case the Peruvian justice system is a travesty (the view I incline to) - or he deserved what he got, in which case the Peruvian electorate is dangerously deluded. You can't have it both ways...

Nevertheless, Peru's economy has showed considerable strength in recent years, growing by around 9% annually in both 2007 and 2008 and even managing a little growth in 2009. You need to net out the somewhat-excessive annual population growth of 1.2% to get a per capita growth figure, however, and the country remains relatively poor, with per-capita gross domestic product (GDP) of $8,600 at purchasing power parity (PPP), well below Chile's $14,700 or Brazil's $10,200, for example.

The current president, Alan Garcia Perez, governed as a leftist maniac in the 1980s, but is a somewhat reformed character now, and has left alone most of the property-rights reforms - such as reliable land registry reforms that were instituted by Fujimori in his 1990s decade of rule. Foreign investment is officially welcomed, and corruption remains tolerable - in the 2009 Transparency International Corruption Perceptions Index, Peru ranked 75th out of 182 countries, level with Brazil.

Nevertheless, with commodities prices trending upward, Peru should continue to do well - its Top Four exports are copper, gold, zinc and crude oil, before you get to a group of agricultural products. The Economist team of forecasters predicts growth of just over 5% in 2010 and 2011, and that forecast may prove low if metals and energy prices continue strong. So, on balance, attractive investment opportunities in Peru should be considered.

There are a number of U.S. and Canadian mining companies with operations in Peru, such as Pan American Silver Corp. (Nasdaq: PAAS), which should be reasonably safe from expropriation even if metals prices continue to rise. There is also one interesting Peruvian-controlled miner listed on the New York Stock Exchange - Compania de Minas Buenaventura SA (NYSE ADR: BVN) - that benefits from very favorable operating costs in its gold operations at below $300 per ounce and trades at less than 14 times trailing earnings, a very reasonable rating in this sector.

Peru may be emerging as an investment destination; it certainly bears watching. But take care; with an unpredictable election next April and a strong leftist candidate in Ollanta Humala (who lost by only 5% in 2006) there is considerable political risk. Still, there is also upside risk - a victory by Keiko Fujimori would certainly clear up some of the country's ambiguities!

Source : http://moneymorning.com/2010/04/08/investing-in-peru/

Money Morning/The Money Map Report

©2010 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules