Foreign Direct Investment Flowing in Latin America
Weekly Update | July 29, 2011 Take a closer look at foreign direct investment trends to see where the real money-making opportunities in emerging markets are. According to The United Nations Conference on Trade and Development’s World Investment Report, the US continued to be the largest recipient of direct investments in 2010 with $228 billion, but the total dollar flows tell a different story. More than half of all global FDI inflows were into developing countries and transition economies. For example, last year, Latin America’s foreign direct investment reached $159 billion. Two Chinese oil and gas companies – China Petrochemical (SNP) and CNOOC (CEO) – made big upstream acquisitions in Argentina and Brazil in 2010 and 2011 totaling $12.6 billion. India also made acquisitions in the region, especially in the energy industry in Venezuela and in the sugar cane industry in Brazil. In turn, large Latin American multi-national companies reinvested abroad for longer-term growth. Brazilian companies such as Vale (VALE), Gerdau (GGB), Braskem (BAK) and Petrobras (PBR) made acquisitions in the iron ore, steel, chemical, and petroleum refining industries in developed countries. I could keep going on with the list of emerging-market countries buying assets and making acquisitions from their new position of financial power. Hopefully, you get the picture: — as global investors tune in to the daily news from the U.S soap opera in Washington and sell U.S. stocks, it’s clear that the relative financial strength and attractiveness of emerging market companies is soaring. Some of these stocks I just mentioned should do well, but you don’t need to be a stock-picker to get in on a potential move. Investors interested in Latin American markets should be ready to step into selected exchange traded funds. The diversity and liquidity offered by broad-based ETFs helps investors participate in the winnings no matters which sectors lead an initial bounce. Here are some broad, diversified Latin American Investing ETFs that you should be watching to invest in, once the smoke in Washington clears in the coming weeks. Read more in the attached weekly update and ... Happy trading this week! Rudy The market-leading stocks last week in Latin America included: Desarrolladora Homex S.A. de C.V. (NYSE:HXM) +9.5% Fomento Economico Mexicano, S.A.B. de C.V. (NYSE:FMX) +7.1% Empresas ICA S.A.B. de C.V. (NYSE:ICA) +4.5% Arcos Dorados Holdings Inc. (ARCO) +4.2% Banco Santander Brasil SA (BSBR) +2.3% If you can not see the file download button and link below for this posting it is because you are not logged in. Login or subscribe to see and download the latest trade ideas. It takes only 2 minutes to subscribe.
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