Investing Update | January 9, 2012
Emerging market governments will trim rates to maintain their high growth rates and fight economic slowdowns.
But for every rule there's an exception and in this case it's Colombia.
The Andean nation's monetary authority has kept rates steady since December following a trend among central banks in Latin America to hold or cut rates on concerns Europe's debt crisis will slow global growth and harm domestic economies.
Once seen as a failing state among emerging markets, Colombia has turned itself around by improving internal security and reducing fiscal deficits. Last year it received three investment-grade credit ratings from Wall Street rating agencies. Now it's Latin America's No. 4 economy, posting economic growth of around 5 percent to 6 percent in 2012 from about 6 percent in 2011.
In this context, Colombia's central bank remains one of the few in the world still weighing rate increases along with India which is likely to change course as it's industrial production declines.
Realistically speaking, in addition to lower rates it will also take 1) a resumption of healthy, sustainable economic growth in the United States, 2) a pickup in demand and worldwide prices for raw materials and 3) some sort of resolution of Europe´s financial woes for emerging market economies and stock markets to resume the remarkable growth they have enjoyed in recent years.
Read more in the attached weekly update and ...
the top performing stocks during the week included GGAL, BMA, TEO, PZE and GGB.
Happy trading this week!
Rudy
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