The recent conflict between Russia and Ukraine has made the countries of the eurozone, the United Kingdom and the United States seek to change their current energy matrix, which depends largely on Russian gas and oil. This change translates into an increase in the demand for metals that are necessary for the production of renewable energy technologies, which will generate potential structural changes for Latin America and Peru, which are the main world producers of metals such as lithium, aluminum and copper, according to Credicorp Capital.
“The change in this matrix will require a change in the structural nature of the countries and will particularly influence Latin America and Peru and will help the countries of our region see a positive impact,” said Jorge Beingolea, Vice President of Solutions of Portfolio of Credicorp Capital during the online conference on “Global markets and their impact on Peruvian assets”.
In fact, according to Beingolea, the positive results are already reflected in Latin American equities and fixed income, which at the close of Friday, April 15, had yielded 24%, unlike the global stock index, which closed -8%. “In other words, the Latin American stock market this year has yielded 32% more than global stocks in the world,” says the Credicorp representative.
Faced with this scenario, the specialist points out that the Latin American stock market had come from two quite complicated years in the context that global stocks “performed very positively.
“The fact that we see such a widespread boost in commodities, in energy, metals, prices, industrials, in food products this year (…) has had a clear impact on Latin American equities, which have a very strong leverage towards commodity prices”, he comments.
Positive environment for the Lima Stock Exchange
Regarding the impact of the crisis caused by the war in Ukraine on the Lima Stock Exchange (BVL), Beingolea indicates that it has benefited “since it has a high sensitivity to commodity prices”
“The current situation, which has therefore represented a positive environment for the BVL, the global environment has been very good for the Latin American stock market in general and the Peruvian stock market in particular,” he remarks.
Reference rate for 2022
In the case of the reference rate for this year, which is currently at 4.5%, the Credicorp economist expects the Central Reserve Bank to possibly raise it to 5.5% this year.
“It will probably stabilize there in line with a stabilization of inflation that is not only set by local factors but also by global factors. A decrease in geopolitical risk and such a marked boost in energy prices should help us see stabilized inflation,” he says.
Finally, he highlights that with a growth rate of 3% estimated by the International Monetary Fund for 2022, “raising it a lot will probably have a negative impact on growth.”