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US Investors Peek Again At Latin American Markets

Mexico's peso crisis proves less scary than the 1982 debt crisis

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LATIN America - which United States investors fled in panic after the collapse of the Mexican peso in December - is once again drawing the attention of the financial community.

And while it may be premature to suggest that the region is fully back into Wall Street's good graces, there is clearly a renewed interest today in Latin America on the part of brokerage houses, public corporations, and investment banks. ''The [economic and market] fundamentals for Latin America are starting to look good again, certainly far better than earlier this year,'' says Pierre Durand, a managing director at investment house Donaldson, Lufkin & Jenrette, Inc., New York.

Earlier this year, DLJ set up a new business group aimed at developing a full range of investment opportunities in Latin America, including a retail brokerage business, mergers and acquisition activities, and merchant banking. ''This seemed like a good time to expand investment ... in Latin America,'' says Mr. Durand, who heads up DLJ's sales and trading activities there. DLJ now has about 30 employees working on its Latin American projects; it is also considering opening an office in Brazil.

DLJ is not alone in looking southward again. Prior to the recent collapse of the Mexican peso - and the subsequent financial bailout of Mexico by the US and the International Monetary Fund - the region south of the Rio Grande was considered one of the hottest ''emerging markets'' for global investors. Investment dollars, from the US and abroad, poured into Latin America in the late 1980s and early '90s. But much of that capital has been withdrawn in recent months.

Now, a flow of capital appears to be returning. And some investment houses are cautiously touting investments in the area.

In a report released in June, for example, investment house Salomon Brothers Inc. concluded that investors should consider looking for selective financial opportunities in Mexico, including ''short-term, high interest-bearing sovereign instruments, and attractive corporate sectors.''

''We know that capital is now flowing back into Mexico,'' although it ''is difficult to quantify'' the amount, says Nariman Behravesh, who heads up the international economic section for DRI-McGraw Hill, an economic-consulting firm in Lexington, Mass.

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