Primary index accumulated a 20% loss so far, and the remainder of the year would fail to fully reverse the loss. Investor are fleeing the market from this article in GESTION (6/17/2013):
Unless you are about to jump in now, investors took a hit during 2013. The BVL will rise by end of year (assumptions) .. But looks like investors are spooked and are starting to call in investments while still in the black on their portfolio.
BVL would rebound in second half, but end the year with losses
Monday, June 17, 2013
Lima Stock Exchange is also affected by the reduction of funds placed in the UPR, from $ 600 million to $ 300 million this year, before the departure of foreign investors. Compass recommends patience and invest selectively.
ALVA PINE FRAME[email protected]
The 2013 began with good prospects for the Lima Stock Exchange (BVL), however, to date, its primary index accumulated a fall of 20%, and the remainder of the year would fail to fully reverse the loss.
This is estimated Alberto Arregui, portfolio manager of Compass Group Peru, who projected a Square Lima rebound by the end of the year, but would be insufficient to carry positive.
"It's very difficult for the index (General Index) significantly reversed by the weight in the mining stocks," he argued.
While many of these actions are now listed far below their fundamental values (expected price), the tendency is to reduce the latter to the fall in metal prices and increased costs of mining firms.
It also found that the expectations of securities linked to domestic demand will also be adjusted downward, to a lesser extent, in line with a slight slowdown in the local economy.
"There is potential for the stock rally, but not sufficient, would have to rise more than 20% to reverse (losses), and in six months it is difficult to make that happen," he said.
Among the factors behind the poor performance of the LSE this year, said the drop in metal prices, with the weight that mining stocks in the domestic stock market.
The prospect of slower growth of the Chinese economy hit industrial metals prices.
Arregui also referred to the negative net investment flows (outflows) from emerging markets, mainly equities.
The fact that Latin America or Peru grow less than expected, and that developed countries had exceeded expectations at the beginning of this year, generated a marginal change in investment flows, he said.
Additionally, signals that suggest a slight recovery in the U.S. economy and the possibility of an upcoming reversal of the expansionary monetary policy of the Fed pushed interest rates of government bonds that country.
These higher rates, in turn, raise the U.S. asset performance and reduce the appetite for instruments that are not denominated in dollars.
At the local level, the slowdown of some macroeconomic data has made any dent in the Lima stock market.
The volatility of the LSE is also explained by the reduction of funds placed in the UPR (package Peruvian shares traded in New York), from $ 600 million to $ 300 million, before the departure of international investors, explained Arregui .
The executive will participate tomorrow in the International Investment Seminar "From uncertainty to the basics" organized by Compass Group.
Selective. Arregui recommended patience to investors, who must concentrate on actions with good fundamentals (not deteriorate substantially). "It is crucial to be very selective in this market, no more times when one could buy everything, and everything went up or down in the same way," he said.