Equities: Clues To Near-Term Trajectory

Our regional market strategy sees equities as the best performing asset class in Latin America over 2011, but recent global events have certainly tested this view. Nevertheless, a core part of our strategy is that rather than another broad-based equity rally like that of 2010, selectivity in terms of both markets and sectors would be crucial in picking the outperformers, since the bulk of the rally is almost certainly behind us. As a result, we still believe that some markets, and more importantly some sub-indices in these markets, will offer better returns than either fixed income or currency markets in 2011, although we that the technical picture for many regional bourses is highly uncertain.

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