Mexico is among the countries that investors look for
MEXICO — After China, Mexico was the most attractive emerging market for portfolio investments in the last three weeks. Especially after the recognition of the president of the Federal Reserve, Jerome Powell, of the weakening of arguments to raise rates in the United States, said Instituto de Finanzas Internacionales (IIF), which is the largest association of financial entities operating worldwide.
In two analyzes, strategists of the IIFy warn that “the pursuit of performance is clearly underway” and has placed Mexico, just behind China, at the front. And they describe asr “well-positioned” South Korea, Indonesia and Turkey.
However, they clarify that in a context of volatility like the prevailing one, investors are still looking for safe assets, such as US Treasury bonds, and that central banks of emerging economies are rebuilding their reserve assets, especially in gold.
The IIF’s analysis of the macroeconomic outlook, which was called The Fed Restarts the Wall of Money to EM, was made based on market prices, and confirms that the prize awarded by Mexico over the United States Fed, 8.25%, has made Mexican government bonds more attractive for foreign investors.
In the analysis, strategists from the institute point out that the least-ranked emerging countries in this environment are Brazil and Russia. Despite the evidence, they point out that the rebound in these flows towards emerging markets may be the result of the contraction observed last year; they lack consistency and could be retracted again.
Source: El Economista