Kyung Bok Cho
Oct. 1 (Bloomberg) — BlackRock Inc., the biggest publicly traded U.S. asset manager, has recently bought Brazilian stocks including Petroleo Brasileiro SA after the global rout made them cheaper, a fund manager said.
“The valuations are among the most attractive in the world,” Will Landers, who manages $5 billion in Latin American equities at BlackRock, told reporters in Seoul today. Landers said he is buying Brazilian equities including banks, while reducing Mexican shares.
This year’s rout has wiped out more than $5.3 trillion of value for global stock markets. Since the start of 2007, financial companies have posted $590 billion of losses and writedowns as the U.S. subprime-mortgage market collapsed. Brazil’s Bovespa index has lost 22 percent this year, less than the 28 percent drop in the MSCI Latin America Index.
The falls were triggered by external reasons and don’t reflect the region’s economic fundamentals or earnings prospects, Landers said.
Brazil is “very attractive for investors who can take a mid- to long-term outlook,” and its banks “are in great shape,” Landers said.
The mortgage-related losses and credit contraction prompted banks to hoard cash in the U.S. and Europe, forcing Lehman Brothers Holdings Inc. into bankruptcy and spurring government seizures of American International Group Inc. and the U.K.’s Bradford & Bingley Plc.
Volatility in the escalated over the past two weeks week as investors swung between concern about a global recession and speculation that U.S. lawmakers will approve a $700 billion plan to bail out banks. The nation’s stocks jumped the most in six years yesterday, with the Standard & Poor’s 500 Index recovering more than half of the previous day’s 8.8 percent plunge, as expectations grew that the plan will be salvaged.
The U.S. Senate will vote today on the government’s bank- rescue package after its defeat in the House of Representatives on Sept. 29.
Landers is “underweight” on Mexican stocks. “Almost 25 percent of overall GDP is geared toward the U.S., so the slowdown is definitely having an impact on the Mexican economy,” he said.
Mexico’s gross domestic product would have expanded 4 percent this year without the problems in the U.S. housing and credit markets, compared with the government’s forecast of 2.4 percent growth, Finance Minister Agustin Carstens has said.
To contact the reporter for this story: Kyung Bok Cho in Seoul at firstname.lastname@example.org
Last Updated: October 1, 2008 02:11 EDT