An industry watcher believes 2024 will be a better year for Latin American companies seeking investment. Andrew Seiz is the vice president of capital markets and investor relations for Kueski, a large Latin American BNPL and online consumer lending provider. He has extensive experience in emerging markets as a portfolio manager at BFAM and Pine River Capital Management with a focus on emerging markets credit, rates and equities.
“The first half of 2023 was relatively quiet when it came to the investor landscape in LatAm,” Seiz began. “However, since markets reopened for IPOs in September, things have picked up.
“So much of LatAm investment is driven by the U.S. rate cycle, and the U.S. economy and recent data have been favorable in that respect. With the growing likelihood of rate cuts from the US Fed next year as inflation eases, investors may be more comfortable deploying capital and this could ultimately benefit emerging markets like LatAm.”
Seiz said that 2023’s rate hikes raised concerns about rising delinquencies for banks and consumer and corporate credit companies. However, that was mostly avoided, as the weakening of credit quality was largely contained.
“Business models, in most cases, proved to be more resilient than expected,” Seiz explained. “In 2024, there could be more of a focus on these companies, especially in cases where the decline in valuations has been excessive relative to the risk profile.”
Seiz suggested that 2024 should provide better results for Latin American companies that seek investment. As economic conditions in the United States and global markets normalize, signs of emerging investor attention on emerging markets are visible.
“As investors consider geopolitical risks in Eastern Europe, the Middle East and concerns over growth in China, Latin America stands out as a relative safe haven,” Seiz said. “Moreover, there is a clear trend towards nearshoring, which favors a wide range of sectors in Mexico – infrastructure, logistics, banking and consumer credit – for at least the next five to 10 years.”