Latest news with #ILF
CNBC
01-07-2025
- Business
- CNBC
How to play one of the hottest regions in the world for stocks
Any way you slice it, Latin American stocks have been on fire this year. The iShares Latin America 40 ETF (ILF) has rallied more than 25% in just the first half of 2025, far outpacing the S & P 500's 5% gain. Many country specific benchmarks and ETFs are doing even better so far this year (gains through June 30 afternoon trading): Brazil: Bovespa up 15%; EWZ ETF up 27% Mexico: S & P/BMV IPC index up 14%; EWW ETF up 29% Chile: S & P/CLX IPSA up 22%; ECH ETF up 25% Peru: S & P/BLV up 12%; EPU ETF up 23% Colombia: MSCI ColCap Index up 20%; COLO ETF up 25% Those gains come even as trade tensions have thrown the global economic outlook into disarray, highlighting Latin America's seeming resiliency. On top of that, many of these markets are trading at historical discounts and are primed for strong growth in corporate profits. Rising currency reserves "Latin American economies became a little bit more boring in the last 10-15 years," Mario Mesquita, chief economist at Itau Unibanco, the largest private sector bank in Brazil, told CNBC. "As they acquired [currency and gold] reserves, they adopted floating exchange rates, which act as buffers." "It used to be the case that when the world economy slowed down, Latin America went into crisis. That's no longer the case," Mesquita added. For example, World Bank data shows that Brazil's total reserves grew by 10% to about $319 billion between 2010 and 2024. Colombia had the biggest expansion in total reserves in that time, surging 119% to nearly $62 billion. Mexico, Chile and Peru saw reserves grow by at least 59%. Those have come in handy as protectionist tariff policies from the U.S. threaten to drive global inflation higher. The U.S. on April 2 unveiled steep levies on imported goods from other countries. This led major trading partners, including China and Canada, to retaliate with duties of their own. President Donald Trump later delayed the implementation of many of the tariffs to allow the U.S. to negotiate with other nations, but several higher levies still remain in place. "That has implications for Latin America, especially for Mexico," said Mesquita. "South America outside Colombia is much more exposed to China. So, the impact of the trade war in South America is indirect, mostly through its impact on the Chinese economy." The stock market outlook for the region, however, is also supported by still-cheap valuations and the prospect of sharp earnings growth this year. Brazil's Bovespa index trades at about 8.4 times forward earnings, well below a historical average of 10.7, Bank of America data shows. Mexico's S & P/BMV sports a multiple of 13, below its average of 14.2$ foing back to 2010. Chile, Peru, Colombia and Argentina also trade at discounts relative to their historical average. A weaker dollar is also boosting these markets in 2025. The dollar index is down 10.6% year to date, making it cheaper Latin American countries to finance dollar-denominated debt. It also makes it easier for consumers in other countries to buy goods that are sold in dollars. What's more, stock market returns denominated in local currency are more valuable when translated back into dollars. Should the U.S. currency stay under pressure, Latin American markets are likely to benefit, especially Brazil. "Under the Trump administration's aggressive trade policies, the dollar is facing renewed pressure as countries increasingly look to de-dollarize," 22V Research strategist Jordi Visser wrote. "Brazil is at the forefront of this shift. Bilateral trade with China is now settled in [Brazilian real and Chinese renminbi], and the BRICS bloc is building frameworks for local-currency settlements," he said, referring to the Brazil, Russia, India, China, and South Africa trading bloc. "Brazil stands at the epicenter of a powerful global reordering. While most investors remain preoccupied with tariffs, U.S. recession risk, inflation, and long-duration bond risks, Brazil has quietly become one of the most compelling macro opportunities of 2025," Visser said in a note last month. How to play it For U.S. investors looking for exposure to these markets, the most straightforward way to play it is through the ETFs mentioned above. Here's how much each fund charges in fees: EWZ: 0.59% EWW: 0.50% ECH: 0.60% EPU: 0.59% COLO: 0.62% There are several individual stocks investors can buy that trade in the U.S., such as MercadoLibre , which Itau head of equity strategy Daniel Gewehr likes. For those able to purchase domestic stocks, Gewehr highlighted names tied to Brazilian infrastructure, Mexican and Chilean financials, as well as consumer staples in Mexico. Overall, however, he's broadly bullish on Latin America. There's a "very good probability in the next 12 months that Chile, Peru, Colombia, Mexico, Brazil have interest rates reduction ... That's good, because that helps foster earnings," he said at Itau's conference in New York in May. Corporate profits throughout the region can grow at about 15%, Gewehr said. "It's a double-digit growth for a single digit valuation" in Brazil, Latin America's largest economy, and elsewhere in the region, where stocks sell at about 9.5 times future earnings, or almost a 20% discount to the historical average, he added.
New Straits Times
17-06-2025
- Business
- New Straits Times
Iran-Israel conflict to drive up export costs, says Johari Ghani
KUALA LUMPUR: The escalating conflict between Iran and Israel is expected to impact the country's commodity export industry, particularly through a sharp increase in logistics and transportation costs, said Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani. He said although the demand for key commodities such as rubber and palm oil is not expected to be directly affected, as they are essential goods, disrupted shipping routes will cause export costs to soar. Johari said shipping companies are now forced to avoid risky areas and choose alternative routes that are longer, or unload goods at safe ports before transporting them by land, thus increasing costs. "When there is a war like the one between Iran and Israel, the logistics costs of products bound for the region will increase. Transportation costs can rise by up to three times. "As a country that is highly dependent on international trade, any disruption in the world's geopolitical landscape will definitely affect us. "Our GDP (Gross Domestic Product) is around RM1.9 trillion. But our trade volume with the world is almost RM2.8 trillion, almost RM3 trillion. This means we are very dependent on trade. So when international trade is affected, it will indirectly affect us," he said. Johari said this at the launch of the Industry Linkage Fund (ILF) 2.0 and the enhancement of the Automation and Green Technology Fund (FAT-G), organised by the Malaysian Rubber Council, here today. Johari said, for example, that the cost of sending a container to West Africa used to be around US$1,200 (RM5,089), but it can now reach up to US$3,000 (RM12,722) — and at one point, even hit US$6,000 (RM25,443) — due to geopolitical risks. He, however, assured that the fundamentals of the country's commodity industry remain strong because Malaysia's main markets, namely India, China, and the European Union are still stable and not directly affected by the conflict. "Demand for food and essential products such as rubber gloves will always be there. The only challenge now is to manage the increasing logistics costs so that the competitiveness of our products is not affected," he said. Recognising the increasingly complex external challenges, Johari said that local industries need to continue to strengthen their resilience through innovation and efficiency improvements. "This is why funds like the ILF and FAT-G are so important. They aim to help local companies, especially small and medium enterprises, to invest in technology, automation, and research and development to produce high-value-added products that are more competitive in the global market," he said.
New Straits Times
04-06-2025
- Business
- New Straits Times
QL Resources outlook steady, but segment risks remain
KUALA LUMPUR: QL Resources Bhd is expected to remain resilient, supported by its strong domestic market focus that buffers it from global trade tensions. However, Public Investment Bank Bhd (PublicInvest) cautions that the outlook for its Integrated Livestock Farming (ILF) segment may soften due to the gradual withdrawal of subsidies. At the same time, subdued consumer sentiment could weigh on its convenience store (CVS) division, which includes the FamilyMart chain. The firm said better performance from surimi-based products should lift Marine Product Manufacturing (MPM) earnings, while the palm oil and clean energy (POCE) segment will continue to be supported by the positive outlook on renewable energy. "Signs of recovery for MPM, as fishmeal selling prices have likely bottomed out following the increase in Peru's fishing quota. "We foresee a potential expansion in profit margins from the surimi-based products, on lower input cost, favourable foreign exchange (forex) rate supported by the ramp-up in capacity from PT Hasil Laut and Figo," it said in a note. PublicInvest noted that ILF earnings are likely to normalise in financial year 2026 (FY26), impacted by the gradual removal of egg subsidy. The firm estimates that QL previously earned approximately eight to 10 sen per egg under the previous subsidy structure of 10 sen per egg. In contrast, the normal margin without subsidy is estimated to be around three to five sen per egg. "To offset margin pressures, QL is reportedly working to increase its product mix toward higher-margin branded eggs, which currently account for about 20 per cent of its total egg sales. "On a brighter note, we believe the strengthening of the ringgit will lead to lower feed costs, which should help cushion the impact of lower margins from egg sales," it said. Meanwhile, the firm also expects a muted outlook for CVS, as it gathers that despite resilient transaction volume, the average basket size is lower due to softer consumer spending. "Nevertheless, we think that the CVS segment's topline growth will be driven by new store openings, as the group targets opening a total of 600 stores by FY27. "Note that as of FY25, the total Family Mart outlet stood at 445. "However, CVS may see margin pressure on higher labour and rental costs," it added. At the same time, PublicInvest also expects the group's POCE segment earnings to grow, supported by the contribution from Plus Xnergy. In addition, the firm believes that the group is well positioned to capitalise on the growth opportunities from the National Energy Transition Roadmap (NETR) initiatives," it said. Overall, PublicInvest has maintained a "Neutral" call on QL Resources with an unchanged target price of RM4.68.
Business Recorder
03-06-2025
- Business
- Business Recorder
Cross-border payments: Allied Bank partners with Paysys Labs to pilot ILP
KARACHI: Allied Bank, one of Pakistan's leading commercial institutions, has partnered with Paysys Labs, a pioneer in next-generation payment technologies, to pilot the Interledger Protocol (ILP) for cross-border transactions. As part of this strategic collaboration, Paysys Labs has also secured the prestigious Digital Financial Services Grant from the Interledger Foundation (ILF). Embracing ILF's vision to 'send a payment as easily as an email.' Paysys Labs, in partnership with Allied Bank, will develop a Proof of Concept (PoC) to implement a node on the ILP Test Network. This initiative will enable Allied Bank's customer accounts to function as wallets on the global ILP network, allowing seamless cross-border payments from other registered and regulated financial institutions. The pilot underscores both institutions' commitment to harness and test the emerging technologies in a secure, compliant, and innovation-driven environment, paving the way for the next generation of digital financial services. Copyright Business Recorder, 2025
Express Tribune
30-05-2025
- Politics
- Express Tribune
Assembly legal advisor resigns
The Legal Advisor to the Khyber-Pakhtunkhwa Assembly Ali Azeem Afridi has tendered his resignation, citing concerns over alleged illegal activities within the assembly. In a letter addressed to the Speaker, Afridi stated that while he was appointed based on merit and legal expertise, his conscience no longer allows him to remain silent on matters he believes violate the Constitution and the law. However, he emphasized that his role as a legal advisor had been more impactful and clarified that he could not be part of any illegal or unconstitutional activities under any circumstances. According to him, this is the right time to step down from the position, and he has made a final decision. He mentioned that he would now prioritize his legal practice. A copy of his resignation was also sent to the Secretary of the provincial assembly. On the other hand, according to the spokesperson for the K-P Assembly Secretariat, Ali Azim Advocate was appointed as Legal Advisor during the tenure of the previous government. The Assembly Secretariat, keeping in view institutional policy and discipline, reassessed his services. Based on this reassessment, Ali Azim was advised to resign respectfully. The spokesperson stated that he was aware of the likely outcome, but instead of following the advice, he fabricated a narrative. There were also serious reservations from the PTI's subsidiary organization, Insaf Lawyers Forum (ILF), regarding Ali Azim's political and personal activities. The ILF had repeatedly pointed out his involvement in such activities.
