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Jorge Valcarcel, CFA

 
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  • Stocks In Peru: Local Market Development And Trading Abroad [View article]
    Pone, there are a couple of factors at work here.

    First, the commodity production mix is different for Peru than it is for Brazil and others. In 2011, the latest available annual data, Copper and Gold were virtually tied in value exported by Peru. If you take a look at the Copper and Gold price movement in 2012 you will see very different charts.

    Second and probably most important is level of FDI / GDP of each of those respective countries. We are seeing record levels of foreign capital coming into Peru and being deployed in the mining, real estate and retail sectors. Those nominal amounts of FDI are dwarfed by Brazil, yet as a percentage of GDP, which is what really matters, Peru is ahead. This is also what is keeping the Peruvian Sol strong, a strong demand for local projects that need to be funded in the national currency.

    I do believe that growth in Peru can continue. As a former global asset allocator at a large Swiss bank you become very aware of the "need" to invest by any pool of capital that has long term liabilities. Cash is not an option right now. That capital is stretching and looking for higher yields (look at the incredible performance of locally denominated EM debt in 2012) and Peru is one of the few still attractive places to invest in terms of economic prospects and stable and investor friendly government. Call it the "least ugly sister" syndrome if you will.

    Thanks for the questions,
    Jorge
    Jan 23 10:33 AM | Likes Like |Link to Comment
  • Hedge Fund Bets On Brazil ETF [View article]
    Their purchase of EWZ could also just be a hedge against some other short position like Brazilian CDS for example. I wouldn't read into Bridgewater's motives unless they expressly said they were going long Brazil.
    Aug 18 12:01 PM | 2 Likes Like |Link to Comment
  • Stocks In Peru: Local Market Development And Trading Abroad [View article]
    I definitely agree that the "under the radar companies" offer the best opportunities going forward. Public utilities such as Luz Del Sur and Electrica de Piura are actual growth companies in Peru while still paying utility like dividends. An interesting stock is also Andino Investment Holding, the only logistics company to be listed on the Peru Exchange. It is comprised of investments in 14 different companies that provide port and airport infrastructure which are leveraged plays on world trade. The issue with these under the radar opportunities is liquidity and access to the foreign investor. Right now there is very little of both. One has to have a local account to invest.
    Aug 8 09:34 AM | Likes Like |Link to Comment
  • Olympic Investing: Can Colombia Bring You Gold? [View article]
    Hi Aaron,

    I enjoyed your article. Colombia seems to share a lot of the fundamentals that are also driving growth in the Peruvian economy. The recent agreement between the Colombian, Peruvian and Chilean stock markets to integrate platforms (http://bit.ly/MnZXof) should hopefully attract more flows into the country.

    Best regards,
    Jorge
    Aug 6 10:16 AM | Likes Like |Link to Comment
  • Stocks In Peru: Local Market Development And Trading Abroad [View article]
    Tomas,

    Thank you very much for the suggestions and glad you enjoyed the article!

    Saludos
    Jorge
    Jul 31 10:30 AM | Likes Like |Link to Comment
  • Stocks In Peru: Local Market Development And Trading Abroad [View article]
    Thanks jazzfan, I'm glas you found it helpful. I hope to publish an article once every 2 weeks or so. Please feel free to suggest a topic that may be of interest.

    Jorge
    Jul 29 08:27 PM | Likes Like |Link to Comment
  • Stocks In Peru: Local Market Development And Trading Abroad [View article]
    While environmental issues and social protests/unrest may cause short-term volatility in SCCO , long term I don't believe it will be issue. The current administration is well aware how much the Peruvian economy and the government tax receipts are dependent on mining royalties. Their populist rhetoric before elections and their behavior once in power have been very different. So while its certainly one of the factors to be monitored, I don't see it as stopping continued mining in Peru.
    Jul 29 08:25 PM | Likes Like |Link to Comment
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