Given the initial uncertainty around MSCI’s decision, I took a pre-emptive trip to Peru accompanied by a handful of other investors.
These included the director of Emerging Markets Research, members of the emerging markets fixed income team, Scott Berg—lead portfolio manager for Global Growth Equity Strategy, Rick de los Reyes—global sector head of metals and mining, and members of the Latin America team whose knowledge of Peruvian companies and the industries in which they operate is second to none.
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They explained that it was largely a one-off move by local institutions concerned about a devaluation of the Peruvian Soles and that the central bank had mitigated the risk by offering banks repos to plug the gap, which they view as temporary.
With the above in mind, we believe Peru’s banking sector is otherwise one of the most structurally attractive across the region and, like its retail sector, is largely underpenetrated—leaving substantial room for credit growth.
Exchange Server 2003 SP2 Update Note: IMF used to be a stand-alone tool downloadable from Microsoft.The Materials do not constitute investment advice and should not be relied upon.Investors should seek independent legal and financial advice, including advice as to tax consequences, before making any investment decision.The sector has been boosted by an influx of foreign investment, courting international clothing labels while well-known coffee shops can be found on many a street corner.We expect growth to persevere as wages rise and an affluent middle class continues to emerge.Meanwhile, costs have been coming down and the stock has recently significantly outperformed, up 150% year-to-date (as at 30 June 2016, in USD).Until recently, Peru’s retail sector was one of the least mature in Latin America, and while retail penetration remains low, growth has picked up significantly.It is understandable, then, that the country is deeply tied to its commodity exports.Copper ore accounts for Peru’s largest export, which brings us to our meeting with the CFO of one of the largest copper producers in the world and the largest in terms of reserves.Based on this likelihood, you can choose to block e-mail messages at the gateway or at the mailbox store.Note: The Intelligent Message Filter is not supported in a clustered environment.