There is a general consensus among North American and European investors that, despite significant macroeconomic headwinds in Europe and China, Latin America is a region with steadfast domestic markets and attractively valued companies with significant growth potential. Also, the consumer goods and services sectors are the most attractive to investors, while utilities, basic materials, and commodities sectors are the least appealing, according to a survery conducted by Ipreo in September 2012, on behalf of J.P. Morgan's Depositary Receipts Group. Respondents for the survey were global institutional investors from the United States, Canada, and European countries.
In total, Ipreo obtained feedback from 40 participants who invest in Latin America. As of June 30,2012, these participants' firms managed a combined $807.6 billion in equity assets, $43.0 billion of which represented holdings in Latin American companies. Of these firms, 70 percent are traditional investment advisers/mutual fund managers, while 30 percent are hedge funds. A high percentage of survey participants believe that now is a good time for a Latin American company to pursue a public equity offering. However, investors have concerns about government intervention, as well as company-specific shortcomings in financial accounting standards, investor communications, and corporate governance practices.
Source: North American and European Investor Opinions of Latin American Companies, by JP Morgan's Depositary Receipts Group