Saturday, June 30, 2012

Bullish on Mexican and Brazilian markets:--By Shan Saeed
I was yearning for many years to share my strategic insights on these markets. Here I am why I think highly about Brazil and Mexico economies for sustainable investments. I wanted to write this piece about these giant nations of the South American continent and how they have progressed in the last 20 years is simply remarkable. The reasons are simple: Investors should consider Mexican and Brazilian markets for their strategic investments.  United States may be the cleanest of the dirtiest shirts among major markets these days but investors should keep an eye on Mexico and Brazil since both these countries have great potential. Brazalian and Mexican governments have used their natural resources very strategically for the benefit of their investors and entrepreneurs. Biofuel, Sugar, Oil, Copper, iron ore, Coffee, Soyabean, Cotton, Silver, Fruits, Vegetables have helped these countries to maintain a healthy export oriented growth. Agriculture is the best investment for the next 5-10 years.
These countries have a strong and attractive balance sheets, higher growth rates, and more attractive exportable natural resources and higher interest rates, as well. America is the cleanest dirty shirt in terms of financial markets. I see a lot of blood in the American and European financial markets going forward till 2015. Printing money will not solve the problem. Quantitative easing is just like fantasy money with no legs. QE will lead to inflation and lower the standard of living of many people in the advance economies. The Federal Reserve just released the results of a three-year study on household wealth, and the results are shocking ...As of 2010, the typical U.S. household had the same net worth they had back in 1992.
That’s right. Even Washington admits that the recent financial crisis has already erased a staggering 39% of the average American’s wealth. Think about it: 20 years of your hard work down the drain! But what’s worse is that this wealth destruction is just a foreshadowing of what’s about to happen ...Washington and Wall Street have now pushed america into the largest financial bubble ever. And when this bubble bursts it will dwarf every other financial crisis in American history.

It’s where money is moving towards out of Euro land and out of all the risky peripheral countries. All big investors are moving their funds in Mexico, Brazil, Chile, Peru, Singapore, China, Malaysia, Thailand, Philippines, Turkey, Mongolia, Vietnam, Kazakhstan, Indonesia and South Korea.
The United States carries lower comparative debt burdens than European countries, is home to the world's reserve currency and has stable property rights. Still, investors shouldn't take such traits for granted. It’s not ultimately and inevitably secure in this position. More and more of the world's top initial public offerings are taking place in emerging markets these days. Three of the top-10 initial public offerings in the last three months took place in Brazil, Malaysia and Mexico as reported by the Financial Times. The Facebook IPO grabbed headlines due to its sheer size at raising an initial $16 billion. Europe, meanwhile, hasn't been a good place for companies to go public lately.
Market conditions make these deals very challenging, and in many cases it seems that issuers and their advisers have simply not recognized the degree of price sensitivity. More market practitioners need to be willing to accept that several elements of European IPO market practice remain flawed.

Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK. 

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