The latest HSBC survey confirms recent Bloomberg findings and put investment in Brazil at the top of global rankings. Between them, Latin America and Brazil are world investment hotspots.
According to those polled by HSBC Holdings plc last week, Latin America represents the best prospects for growth in investment over the next six months. In the survey, 30% of businesses ranked Latin America in top position for investment opportunities in the next semester. Latin America came ahead of China (25%) and Canada (15%), two other major trading regions for importers and exporters.
Latin America is favoured for its high economic growth – the region is set to grow 4.8% this year. Leading the Latin American boom are Brazil and Peru with Colombia and Chile also experiencing strong economic growth, which emphasises the area’s potential as a whole.
Of all the Latin American nations, Chile and Brazil represent the best bets for investment. Brazil is enjoying strong growth, record employment figures and the prospect of becoming the 5th largest economic power in the world within the next decade. Contrast this with many developed countries, currently facing high unemployment, burgeoning deficits and fears of a double-dip recession.
The HSBC survey also highlights the changing dynamics in world economics as emerging markets dominate the top-performing positions. Not only have emerging markets generally experienced a short recession, they are also leading the rest of the world to economic recovery.
With emerging markets set to represent almost half the global economy over the next few years, many multinationals are convinced that investment in these markets makes real business sense. Large companies are moving into emerging markets as part of their global strategy. And Brazilian investments tops the list for many – in the HSBC survey, 74% of companies said they currently trade with Brazil and a similar figure (76%) does business with China.
A particularly strong sector in Brazil is private equity with two-thirds of private equity deals in Latin America taking place here. The latest arrival is Blackstone, who now has a 40% share in the Brazilian Pátria. For the company, the creation of the Brazilian middle classes “has got very substantial momentum” and as a result, presence in Brazil is a must. Other private equity firms such as Carlyle Group and Warburg Pincus have also expressed strong interest in Brazil, proving Pátria’s point that “the competition is coming to Brazil”.
For Obelisk International, the Bloomberg and HSBC surveys underline the investment potential in Brazil. As more businesses come to appreciate this potential, more surveys will highlight the fact that Brazil is the place to be when it comes to investment. Over the next six months, Obelisk International expects to be joined by many more companies in Brazil.