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(Bloomberg) – According to Morgan Stanley, the growth of corporate profits and "some help" from the Federal Reserve could support Latin American equities in 2019.
"We hope that factors In the report published on November 26th, strategists Guilherme Paiva, César Medina, Nikolaj Lippmann and Valentina Rodriguez wrote evaluation multiples throughout 2019. Gains in the region are expected to increase by 17% in 2019 and 5% in 2020. The strategists predict a return of 12% in USD from the MSCI Latin America Index to reach the goal of 3,000 by the end of 2019., with a premium of positive risk, taking into account the positive 27% / negative 18% projections for their bull and bear cases, respectively.
Despite the expectation of short-term pressures from the US adjustment cycle, global factors should make increase the evaluation multiples in the medium term.
"As the year progresses, a possible pause for the Fed after June 2019 could be a major positive catalyst for global equities," said the strategists.
Morgan Stanley has an overweight perspective for Brazil, Peru and Chile, neutral for Argentina and underweight for Mexico and Colombia. The ten best ideas of the bank's actions in Latin America are: Estácio Participações SA, Petróleo Brasileiro SA, Usinas Siderúrgicas de Minas Gerais SA, Odontoprev SA, CVC Brasil Operadora and Agência de Viagens SA, Banco do Brasil SA, EcoRodovias Infraestrutura , Mexichem SAB of CV, Cemex SAB of CV and Credicorp Ltd. Original note: Morgan Stanley sees the Fed help the actions of the LatAm to return 12% in 2019
Reporter in the original note: Vinícius Andrade in São Paulo, [email protected] [19659007] Editors responsible for l 39 original story: Courtney Dentch, [email protected], Joanna Ossinger
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