Highland Capital Management and James Dondero are focusing on Argentina. Mr. Dondero believes the region shows promise as a potential alpha generator. During the last few decades a lot of Latin America has been subjected to fiscal imprudence, high inflation and unstable currencies. Fiscal reform throughout Brazil has been hindered by continual corruption scandals. Venezuela is facing the challenges of hyperinflation, severe economic malaise and issues in the energy sector. This has caused numerous individuals to leave the country. Economic progress is being shown by some Latam countries and is appealing to the investors. The challenge is in the lack of liquidity in the markets. Learn more about Highland Capital at Crunchbase.
One of the analysts at Highland Capital Management is Mauro Staltari. He believes Argentina is different. The company has numerous teams including offices in Buenos Aires and Sao Paulo. Argentina represents the third largest economy in Latin America. The population is well educated and there is a wide variety of natural resources. The economic growth has been slowed by political turmoil. Argentina is starting to emerge from this turmoil and the economic recovery is promising. Read more at bloomberg.com.
Mauro Staltari refers to Argentina as an island located in Latin America. He believes for the next two or three years there are uncorrelated investment opportunities. He stated the yields and curve will be affected by the increasing interest rates. He cited additional drivers such as energy tariffs normalizing. He feels there is a distinctive difference between Latin America and Argentina.
The country has been guided by populist Peronist policies since the 1960’s. Subsidies have kept the markets at an artificial low. Mauricio Macri is the current President of Argentina. He has made significant changes due to his leadership of the center right political party. During the last few years the President’s administration has started to reverse the long term populist policies of the country. The new policies are market oriented. This has led to a lot of changes since Mauricio Macri was elected in December of 2015. He has increased the energy tariffs after they were frozen for well over a decade and attempted to stimulate investments by lifting the currency controls.