Content area
Full text
Note: A fresh generation of corporate executives is taking advantage of Latin America's dynamic growth and transforming its companies into world leaders.
Leaders of Latin American public companies should be sitting pretty these days. Many of the region's local economies are enjoying real gross domestic product growth rates that are among the highest in the world, improvements in corporate reporting and disclosure are reassuring foreign investors more than ever, and many companies are trumpeting sound fundamentals and robust profits.
[Click here to view the complete rankings for the Latin America Executive Team ]
However, skittishness about the strength and sustainability of the global economic recovery , particularly in the U.S. , continues to cast a long shadow over Latin American and other emerging markets, with investors demonstrating a willingness to yank money out of equities at the first sign of trouble anywhere in the world.
"The two biggest issues right now are the downshift in U.S. economic data over the summer and the second stage of quantitative easing in the U.S.," explains Ben Laidler, director of Latin American equity research for J.P. Morgan in New York. "On the back of that has been the flow-of-funds story into the emerging markets in all sectors, which in turn has produced lots of noise on capital controls. Overall, global drivers predominate."
And those drivers can wreak havoc. Case in point: Sovereign--debt woes half a world away, in Dubai and then in Europe, sent Brazil's benchmark Bolsa de Valores, Mercadorias e Futuros Bovespa index plunging nearly 11 percent at the start of the year, as investors fled stocks in search of safer havens. Those losses were reversed by April, but then China's announcement that it was reining in its stimulus spending, in an attempt to cool down its own over-heating market, sent the Bovespa tumbling 19 percent by May. It subsequently recovered, gaining 19 percent through September, as Brazil's , and the region's , torrid growth showed no signs of slowing. Just the opposite, in fact.
Last month the International Monetary Fund revised its 2010 forecast for the region upward, predicting that GDP growth in Latin America and the Caribbean would accelerate by 5.7 percent this year (compared with 4.8 percent for the global economy), with the most vigorous...