拉美地区-股票策略-股票对外汇风险的敏感性.pptx

Overview
by Guilherme Paiva, Regiane Yamanari & Valentina Rodriguez
MSCI Latam is down -14% in USD year-to-date, and an even weaker -25% from its late January peak. We should note a stronger USD explains almost 100% of the recorded losses in 2018, as positive earnings growth in local currency has practically offset the multiple derating experienced during the period. At the country level, the foreign exchange rates of basically all the countries have either weakened (Argentina -34%; Brazil -11%; Mexico -5%) or remained stable (Chile and Peru) this year; Colombia has been the only exception with a stronger currency.
Year-to-date, the US dollar is now up 6% vs a basket of developed currencies (DXY index), up 5% vs a basket of emerging currencies, and up a significant 15% vs a basket of Latin currencies (ex-Argentina). Several clients currently wonder if the recent USD rally is finally over. Hans Redeker, our global head of forex strategy, argues the USD rally appears to be close to an end. The US Treasury yield curve has recently undergone a bear flattening move after the release of strong US labor market data, industrial raw material prices have broken higher, and the global economy has shown increasing signs of ing the Q1 growth slump. Hence, three factors out of his four-factor USD scorecard model are now pointing towards a weaker USD.
We have 3 objectives in this report with the USD gyrations in the background:
To provide an updated outlook from our global economics and forex teams;
To briefly discuss the current views from our forex colleague Andres Jaime for Latin currencies; and
To explore how currency impacts the economic value of panies in Latin America by updating our prior work on the topic.
Hans Redeker and Andres Jaime are fixed e strategists and are not opining on equities. Their views are clearly delineated.
Exhibit 2: Year-to-date Latam equities have suffered from a stronger USD
Latam: MSCI indices YTD USD return breakdown
11%
11%
-5%
-12%