Salient to Investors:
Timothy Drinkall at Morgan Stanley were overweight in Argentine stocks at the ed of 2012 after avoiding them earlier in the year. Drinkall said valuations are extremely low after government controls on imports and currency markets weakened Argentina’s economy and President Fernandez’s declining popularity has curtailed her ability to implement some of her negative policies. Drinkall expects the economy to expand between 2 percent to 3 percent in 2013 versus less than 1 percent in 2012, helping boost corporate profits.
Sam Vecht at BlackRock Frontiers Investment Trust increased Argentine stocks to 3.9 percent of total holdings at January 16 after valuations fell so much. Vecht said foreign companies’ increased interest in Argentina’s shale fuel deposits may signal easing concern about the risk of doing business in the country.
Thomas Vester Nielsen at Lloyd George Mgmt said the odds of government meddling in listed companies are still too high to invest in Argentine equities.
Bloomberg reports the cost of credit-default swaps has almost tripled during the past year to the second highest after Greece.
Hans-Henrik Skov at BankInvest New Emerging Markets Equities Fund said Argentina is moving in the wrong direction so doesn’t mind missing out on market rallies.
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