A study from the CFA Institute finds Latin American investment professionals feeling positive about the global economy and their own local markets.
A CompTIA study published earlier this year found executives in Brazil and Mexico feeling more optimistic about improving business conditions than executives in most other parts of the world. Investment professionals in those countries also are feeling more optimistic about economic prospects than their global peers, according to the CFA Institute 2014 Global Market Sentiment Survey (GMSS).
The CFA survey found that 63 percent of respondents believe the global economy will expand in 2014, representing a significant positive shift in opinion over the previous two years.
“The number of members who expect the global economy to expand has nearly doubled in the last two years,” said John Rogers, CFA, president and CEO of CFA Institute.
Respondents in Latin America were among the most bullish. More than 70 percent of them expect global business conditions to improve in 2014, and 53 percent of Latin American respondents think their local markets will expand.
Interestingly, while weak economic conditions is considered the biggest risk to local markets by global respondents, Latin Americans are more concerned about political instability.
The surveyed investment pros also see Latin America as a strong investment. When asked to rank the equity markets considered the best investment opportunity in 2014, Brazil ranked fifth and Mexico ranked eighth. The top markets were the United States, cited by 26 percent of respondents; China, mentioned by 10 percent; and Japan and Germany, each mentioned by 6 percent. Some 70 percent of respondents selected equities as the investment that would provide the highest total return in the coming year, up from 50 percent last year.
Despite the market improvements, many respondents believe the industry needs to focus on regaining investor trust that suffered during the financial crises of the past few years. For example, 54 percent of respondents said a lack of ethical culture within financial firms has contributed to a lack of industry trust.
“As markets rebound, we are working to ensure that attention does not shift away from meaningful reforms that might restore investor trust and strengthen the financial system’s ability to resist shocks in the future,” Rogers said.