Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Investing lessons from the 1987 Stock Market Crash From Who Beat it - 20th Oct 19
Trade Wars: Facts And Fallacies - 20th Oct 19
The Gold Stocks Correction and What Lays Ahead - 19th Oct 19
Gold during Global Monetary Ease - 19th Oct 19
US Treasury Bonds Pause Near Resistance Before The Next Rally - 18th Oct 19
The Biggest Housing Boom in US History Has Just Begun - 18th Oct 19
British Pound Brexit Chaos GBP Trend Forecast - 18th Oct 19
Stocks Don’t Care About Trump Impeachment - 17th Oct 19
Currencies Show A Shift to Safety And Maturity – What Does It Mean? - 17th Oct 19
Stock Market Future Projected Cycles - 17th Oct 19
Weekly SPX & Gold Price Cycle Report - 17th Oct 19
What Makes United Markets Capital Different From Other Online Brokers? - 17th Oct 19
Stock Market Dow Long-term Trend Analysis - 16th Oct 19
This Is Not a Money Printing Press - 16th Oct 19
Online Casino Operator LeoVegas is Optimistic about the Future - 16th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - Video - 16th Oct 19
$100 Silver Has Come And Gone - 16th Oct 19
Stock Market Roll Over Risk to New highs in S&P 500 - 16th Oct 19
10 Best Trading Schools and Courses for Students - 16th Oct 19
Dow Stock Market Short-term Trend Analysis - 15th Oct 19
The Many Aligning Signals in Gold - 15th Oct 19
Market Action Suggests Downside in Precious Metals - 15th Oct 19
US Major Stock Market Indexes Retest Critical Price Channel Resistance - 15th Oct 19
“Baghad Jerome” Powell Denies the Fed Is Using Financial Crisis Tools - 15th Oct 19
British Pound GBP Trend Analysis - 14th Oct 19
A Guide to Financing Your Next Car - 14th Oct 19
America's Ruling Class - Underestimating Them & Overestimating Us - 14th Oct 19
Stock Market Range Bound - 14th Oct 19
Gold, Silver Bonds - Inflation in the Offing? - 14th Oct 19
East-West Trade War: Never Take a Knife to a Gunfight - 14th Oct 19
Consider Precious Metals for Insurance First, Profit Second... - 14th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - 13th Oct 19
The Most Successful IPOs Have This One Thing in Common - 13th Oct 19
Precious Metals & Stock Market VIX Are Set To Launch Dramatically Higher - 13th Oct 19
Discovery Sport EGR Valve Gasket Problems - Land Rover Dealer Fix - 13th Oct 19
Stock Market US Presidential Cycle - Video - 12th Oct 19
Social Security Is Screwing Millennials - 12th Oct 19
Gold Gifts Traders With Another Rotation Below $1500 - 12th Oct 19
US Dollar Index Trend Analysis - 11th Oct 19
China Golden Week Sales Exceed Expectations - 11th Oct 19
Stock Market Short-term Consolidation Does Not change Secular Bullish Trend - 11th Oct 19
The Allure of Upswings in Silver Mining Stocks - 11th Oct 19
US Housing Market 2018-2019 and 2006-2007: Similarities & Differences - 11th Oct 19
Now Is the Time to Load Up on 5G Stocks - 11th Oct 19
Why the Law Can’t Protect Your Money - 11th Oct 19
Will Miami be the First U.S. Real Estate Bubble to Burst? - 11th Oct 19
How Online Casinos Maximise Profits - 11th Oct 19
3 Tips for Picking Junior Gold Stocks - 10th Oct 19
How Does Inflation Affect Exchange Rates? - 10th Oct 19
This Is the Best Time to Load Up on These 3 Value Stocks - 10th Oct 19
What Makes this Gold Market Rally Different From All Others - 10th Oct 19
Stock Market US Presidential Cycle - 9th Oct 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

Fantastic Investor Ground Floor Opportunity

Companies / Emerging Markets Jun 04, 2013 - 02:52 PM GMT

By: Money_Morning

Companies

Martin Hutchinson writes: Investors should be very excited.

Because it's only once in a very long time that investment watersheds like this happen and you can get some long-term positions at stunning bargains.

Last week Mexico, Chile, Colombia and Peru deepened their "Pacific Alliance" by removing tariffs on 90% of the trade between them, beginning July 1.


Now, there have been many such bilateral trade deals, most of them only moderately important at best. But this one is different.

This one marks the emergence of a genuine investment opportunity in Latin America that isn't Brazil and isn't doomed to collapse within a few years.

For anyone looking for alternatives to a U.S. market that looks increasingly pricey and vulnerable - and that should be you, if it isn't already - you can't miss this opportunity.
Free and Brave vs Weak and Scared

Latin America has increasingly separated itself into two groups, those that believe in free markets and those that don't.

On one side you have Venezuela, which runs a socialist state on the back of oil revenues, and Argentina, defaulting on its debt, increasingly impoverished and inclined to nationalize foreign investment. Smaller countries like Bolivia, Ecuador and Nicaragua have joined this group.

Brazil may have looked like a winner in 2007-10 but in reality is solidly also a member of this group since Lula came to power in 2002.

On the other side you have Chile, free market since Augusto Pinochet's 1973-90 dictatorship, but lonely for a long time. More recently, Colombia became a free market under Alvaro Uribe (2002-10) and has more or less continued under Juan Manuel Santos since 2010.

More surprising, Peru's Ollanta Humala had campaigned as a leftist in 2011 but since his election has governed as a moderate free marketer, albeit with a special (and justified) focus on the needs of Peru's indigenous peoples.

Finally Mexico, which had seemed lost to free markets even under the 12-year center-right rule of Vicente Fox and Felipe Calderon, has moved sharply in a free-market direction under its new President Enrique Pena Nieto, even though he's a member of the traditionally obscurantist PRI.

Among them, the four economies have a population of 208 million and a GDP of $2 trillion - both larger than Brazil. In addition, other countries such as Panama and Honduras have applied to join the Pacific Alliance, and I wouldn't mind betting that Paraguay and Uruguay think hard about it, since their own Mercosur alliance isn't going anywhere - it's dominated by Brazil and Argentina and now includes leftist Venezuela.
Pacific to Proactive

The new agreement, signed in Cali, Colombia on May 23, will allow the four countries to increase trade among themselves, currently less than 5% of their total trade, and to use each other's trade treaties to export to third countries.

Chile has a particularly good set of trade treaties and the Colombian newspaper Diario has suggested a list of products such as pineapple products and glassware which Colombia will be able to export to Chile for further processing and re-export to Asia. It doesn't hurt either that Peru, Colombia and Chile have integrated their stock markets and Mexico is working on joining them.

To that end, a great first-stop for investors interested in Chile is AFP Provida SA (NYSE: PVD) the Chilean leader in the management of privatized pension funds, with operations in Ecuador, the Dominican Republic and, most interestingly, Mexico.

It currently trades at only 6.4 times trailing earnings, with a dividend yield of 11.5%, but that partly reflects a bullish 2012 in Chile. Still, it's a very attractive entry in a business that could grow a lot further in the other Alliance countries and elsewhere.

All four countries have decent growth this year, and none of them have major financial problems. Colombia, Peru and Chile are all resource rich, while Mexico is increasingly competitive in manufacturing as Chinese costs rise.

While these four countries may individually be too small to throw their weight about, by integrating their economies they should be able to create a strong bloc that will be highly competitive in world markets.

That's why I like Global X FTSE Colombia 20 ETF (NYSE: GXG). It's the leading ETF for the Colombian market, with investments in the major Colombian companies such as Ecopetrol (NYSE: EC), Pacific Rubiales Energy (OTC: PEGFF), and the banks. This is the simplest way into an attractive market with lots of growth potential.

Of the four stock markets, Chile and Mexico are pricey at close to 20 times earnings, according to the Financial Times, but Colombia at 15 times earnings and Peru at 13 times earnings are more reasonable.

Unfortunately, there is no Pacific Alliance ETF - yet (it seems the ETF designers have missed a trick).

Source :http://moneymorning.com/2013/06/04/a-fantastic-ground-floor-opportunity/

Money Morning/The Money Map Report

©2013 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 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