Investors began returning to emerging markets in the second quarter, but many have given Latin American equities a miss, opting instead for the region's robust bond market. Issuance topped $120 billion in 2013 - a record-and market participants expect this year's total to be only slightly below last year's. Compare that to the region's stock markets, most of which ended 2013 in the red and made only modest gains in the first half of this year. "We expect fixed income to remain in favor relative to equities in the near term," reports Rodrigo Goes, head of equity research, sales and trading at BTG Pactual in Sao Paulo. "Yields remain attractive, particularly in Brazil, while regional electoral-related uncertainties coupled with global macro and geopolitical concerns should keep investors underweight riskier assets, such as equities, for a while longer."
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