Like Mexico, Peru’s oil production has been declining and although Peru’s oil reserves are not as bountiful as Mexico’s, the latter is home to “the eighth largest crude oil reserve holder in Central and South America, with 633 million barrels of proved reserves, as of January 2014, according to Oil and Gas Journal. [Peru ETF Could Benefit From Energy Investment]
On the upside, Peruvian stocks are somewhat discounted relative to other LatAm markets accessible via U.S.-listed ETFs.
“From an absolute valuation standpoint, the IGBVL stock exchange’s positive-adjusted, one-year forward price-earnings multiple (p/e) of 16.1x in US dollar terms may appear inexpensive compared with that of Colombia (17.0x), Mexico (19.6x) and Chile (17.9x). Still, it is comparatively more expensive than that of Argentina (7.9x) and Brazil (11.7x) as well as that of Latin America (14.1x) and emerging markets (11.8x) compositely. Also, it understates its record high of (28.5x), far exceeds its all-time low (2.8x) and is 5.5 points above its historical average (10.6x),” according to S&P.
iShares MSCI All Peru Capped ETF
Tom Lydon’s clients own shares of ILF.