Tag Archives: Mexico

Latin America Weakness in 2015? Energy & M&A Big Factors

With Latin America equities likely to underperform other emerging markets in 2015 for the sixth year in a row, favor Mexico and expect weakness in Brazil, Morgan Stanley says.

While Mexico and Brazil valuations look rich, Morgan Stanley is overweight Mexico and underweight Brazil as part of its outlook for Latin America investing in 2015. Big factors in the outlook for Latin America are global and out of its control: the direction of oil prices, the effectiveness of Japan’s economic policies, and reform in China, writes Jorge Kuri, director of Latin America equity research atMorgan Stanley.

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AAA Rated France May Be Vulnerable to Downgrade Following Cut to the U.S.

investor skittishness over France's vulnerability

investor skittishness over France's vulnerability (source: Bloomberg)

As reported by Bloomberg’s Gregory Viscusi, the decision by Standard & Poor’s to downgrade the U.S. credit rating leaves France as the AAA country most likely to lose its top grade, some investors and economists say.

France is more expensive to insure against default than lower-rated governments including Malaysia, Thailand, Japan, Mexico, Czech Republic, the state of Texas and the U.S.

“France is not, in my view, a AAA country,” said Paul Donovan, London-based deputy head of global economics at UBS AG. “France can’t print its own money, a critical distinction from the U.S. It is not treated as AAA by the markets.”

While all three major credit-rating companies have confirmed France’s top level in recent months, market measures indicate increasing investor skittishness over the country’s vulnerability to the European debt crisis. Euro-region central bank governors signaled after emergency talks yesterday that they would buy bonds from Spain and Italy to counter investor concerns and limit fallout from the U.S. cut.

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