South America, for more attentive investors, is much more than just Brazil. For example, Mexico is faring particularly well as it enjoys a few favorable trends, including the start of a credit cycle and the slow penetration of financial services, growing salaries, energy sector reforms and the rebirth of production. Furthermore, Mexico is one of the few countries on the continent implementing fairly orthodox policies to balance the GDP growth model, taking no notice of currency depreciation and rising raw material prices. Despite various disappointing results due to the political transition, weaker exports to the United States and a few issues in the real estate sector, we expect a significant turnaround in the second half of the year. Banks, airports and consumer goods offer value at a discount, but we recommend caution when investing in the rest of the market, especially energies and infrastructures.
Argentina, on the other hand, constitutes one of the most interesting long-term acquisition opportunities. Unlike in other emerging countries, the government is implementing the right mix of interest rate, currency and tax policies, which will give the country access to international loans. However, the current situation is characterized by several critical factors, but we expect the October 2015 elections to bring back normalcy. Argentina is therefore not a country to be overlooked by investors with a long-term view.