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Coming to a Standstill

Sep 1, 2011

New issuance prospects in August appeared as dim as they had at any time since the 2008-2009 financial crisis. With markets shedding value across the globe, investors started to question EM strategies as funds withdrew from risk. Pointing again to the strong fundamentals that led LatAm through the last crisis, bulls see the region muddling through and new issuance returning. “In Latin America, there has been an average of $7 billion to $8 billion in new equity issuance per quarter during the last 18 months, and we see no reason to suspect the market would slow from that,” said Jason Press, Citigroup’s LatAm equity strategist, speaking in early August. The US bank has a preference for companies tied to interest-rate sensitive sectors that have suffered but should recover once Brazilian government policies become clearer and worries about the US and Europe subside. These include banks, low-income homebuilders, and certain...

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