March 1, 2006
Jerry HaarLast year was a good one for both Latin America and the region's financial markets, and 2006 could well see a continuation of these favorable trends. Currencies in Brazil, Chile and Mexico gained against the dollar on speculation that local yields will maintain their attractiveness in anticipation of the US Federal Reserve's halt in interest rate increases. Investors will be motivated to seek higher returns on riskier Latin American bonds and currencies.
A diversity of deals are continuing apace, from Colombia's $1.13 billion buyback of dollar- and euro-denominated bonds, led by Goldman Sachs and Merrill Lynch, and Gerdau's $600 million perpetual global offering led by
The money that has been pouring into Latin America recently reflects the attractive returns that can be found in the region, not progress on reforms.