Still, some LatAm markets have detractors. Earlier this month, BlackRock, the world’s largest asset manager, revealed underweight ratings on Brazil and Mexico. J.P. Morgan does not agree, at least not when it comes to Mexico. Last week, the bank said it is overweight on Mexico.
“We are OW Mexico based on (1) strong forecast economic growth acceleration to 3.4% in 2014E from 1.4% in 2013E; (2) estimated domestic FX appreciation (vs. the USD) through 2014 year-end (MXN12.25 /USD); (3) enhanced cost competiveness and high sustainable growth outlook – the agenda on reforms has advanced; and (4) leverage to an expected US manufacturing rebound,” according to a J.P. Morgan note. [J.P. Morgan Boosts Mexico ETF]
“While business has been gaining steam, a burgeoning middle class has been taking root and their spending has been increasing. Mexico’s growth engine over the past five decades has been tourism and there are indications that the industry may begin to grow once again,” said Eickler in the IBD interview.
iShares MSCI Mexico Capped ETF
