JP Morgan: Government Intervention Only Downside to Sizzling LatAm Investment

BY STAFF REPORT

With expanding middle class and rising income levels, Latin America offers an attractive investment opportunity for global investors. Consumer goods and consumer services sectors the most attractive of them all, says a latest survey from US investment bank JPMorgan Chase.

The investment bank claims that hundreds of businessmen from Europe and North America participated in its survey.

What made Latin America so attractive for investment is expanding middle class, rising income levels and low domestic unemployment, the report noted.

In the survey, a majority of investors said they were eager to participate in a LatAm company’s initial public offering (IPO). While there is a significant macroeconomic headwind in Europe and China, Latin America offers ‘attractively-valued companies’ that demonstrate significant growth potential, the report added.

JP Morgan conducts the survey every year with an aim of helping its clients better understand investor sentiments toward companies in the region. “The findings from this year’s survey may help Latin American issuers identify ways to improve their market valuations over time and to better compete for and attract capital needed to fund their growth,” said Candice Teruszkin, Latin America Regional DR Head of JPMorgan.

The survey, conducted in the month of September, gathered the opinions of 40 institutional investors based in North America and Europe. These investors, according to the investment bank, have held $43 billion worth of shares in Latin American companies.

The only hurdle, according to investors, is government intervention. Nearly 38 percent of respondents blamed government intervention for unfair valuation of some of the companies’ shares.