Russia Default Redux as Brazilian Stocks Sink: Chart of the Day
By Eduardo Thomson and Sebastian Boyd - Oct 24, 2011 12:00 AM GMT-0200
Brazilian equities are trading at the biggest discount versus their Mexican shares in 13 years, a sign to PineBridge Investments to start buying consumer stocks in Latin America’s largest economy.
The CHART OF THE DAY shows that the difference between the MSCI Mexico Index’s price-to-earnings ratio on Oct. 21 was the widest versus the MSCI Brazil Index’s since October 1998, when investor concern mounted that Brazil would default after Russia halted local debt payments two months earlier.
MSCI Brazil has plunged 25 percent this year, pushing its price-to-earnings ratio down to 8.5, according to data compiled by Bloomberg. The Mexico gauge has fallen 15 percent this year, leaving its ratio at 22.7.
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