Equity Investors Rush to LatAm As Commodity Prices Soar

While emerging economies in most parts of the world suffocate under the weight of rising inflation and high commodity prices, some countries in Latin America are seeing both their stock markets and currencies climbing in value.

Latin American stock markets have outperformed larger economies by close to 25 percentage points this year, according to Reuters.

It seems foreign inflows had begun to gush even before Russia invaded Ukraine. The region’s stock and bond portfolios pulled in as much as US$18 billion in the first two months of this year alone.

The capital influx picked up steam further as the US central bank began raising interest rates and commodity prices jumped.

Some Latin American countries are also seeing their currencies strengthening against the US dollar. The Reuters report describes the currencies of Brazil, Colombia, Peru and Chile as “best-performing”.

Thanks to oil exports, Brazil and Colombia are seeing their foreign currency reserves rising in size with each passing day.

Foreign investors are betting huge sums of money on stocks in Brazil and Chile. Analysts say stocks in Argentina have gone up in value in recent weeks.