Is Argentina Ready For Prime-Time?
Despite being removed from the MSCI Emerging Market index last year and defaulting on its debt in 2001, Analysts are predicting that Argentina may be an interesting investment destination in the years ahead. Many forget that in 1999 Brazil could not pay its debt. Similarly, Columbia in 2001 experienced similar problems.
Analysts point to several reasons to be bullish on the Latin American nation. With the global economy recovering, the export outlook for Argentina’s agricultural goods is improving dramatically. The nation boasts some of the most fertile grounds on the continent. Secondly, the current administration faired poorly during mid-term elections and a new investor friendly regime could come into power. And finally, the nation’s banks appear cheap compared to those in the region.
While there is no Argentinean ETF (yet) there are a few publicly traded ADR’s on U.S. Exchanges. Telecom Argentina (NYSE: TEO) is one of the nation's largest telecommunications providers and are currently yielding 5.3%. Petrobras Energía SA (NYSE: PZE) engages in oil exploration and production activities in Argentina, Bolivia, Ecuador, Peru, and Venezuela. Trading at a cheap P/E of 8, Banco Macro (NYSE: BMA) yields 2.4%.
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