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South American stock markets: Bull prevails in 2023, now all eyes are on the vote in Mexico and Venezuela

Buenos Aires and Sao Paulo closed 2023 on the rise, but Mexico City lost something in view of the June vote, when Lopez Obrador will not be able to run again. Boric's Chile is in difficulty but the stock market is holding up. Maduro worries: will he guarantee true democratic elections?

South American stock markets: Bull prevails in 2023, now all eyes are on the vote in Mexico and Venezuela

It was a predominantly 2023 of rises for the main ones Latin American stock indexes. But 2024, according to analysts, promises sparks due to political uncertainty in the area, which is expected to grow given that several countries will vote.

The year just ended led to right-wing power in three states: Paraguay, Ecuador and especially Argentina, with the new president Javier Milei which for now does not displease the markets at all and which risks breaking the bank of Mercosur, the South American trade union. This year, however, Mexico, Uruguay and some Central American countries will go to the polls including Panama, El Salvador, the Dominican Republic and above all Venezuela, where last October the dictator Nicolas Maduro, under pressure from the USA, signed a agreement with the opposition to guarantee free elections, but it is far from a given that this will happen and in the meantime the Chavista leader is trying to annex neighboring Guyana to extract more oil, risking a war breaking out in the region.

South America: best stock market for 2023 is Buenos Aires

In this scenario, the Brighter bag of all in 2023, even if for mostly speculative reasons, was that of Buenos Aires. , which practically tripled its value during the calendar year. ThereMerval index it had a surge both after the August primaries which proclaimed Javier Milei as frontrunner in the Casa Rosada, and even more from November onwards, after the election and installation of the far-right leader.

Making the stocks run, in a desperate situation for the Argentine economy, with inflation at its highest ever (prices more than doubled, almost tripled compared to a year ago), the exchange rate with the dollar further exploded after the devaluation ordered by Milei and the state coffers empty as never before, it was probably - in addition to speculation - the prospect of a clear change of direction from here on out, of a "shock therapy" as the president himself defined it. There “Milei cure” in fact it has already started and clearly winks at the world of finance as it is drastically oriented towards cuts in public spending, the privatization of state enterprises and the broad liberalization of contractual rules. Precisely for this reason the Buenos Aires Stock Exchange is in full bullish phase, which is destined to continue into the first part of the new year.

Brazil: Record-breaking Bovespa Index

The Brazilian stock market index, the Bovespa of Sao Paulo, which in 2023 gained more than 20%, reaching its all-time record in the last week of the year over 134 thousand points, thanks above all to a bullish phase that began at the end of October and is still ongoing. For analysts, however, the rally will diminish in 2024, despite the rate cut.

In the last weeks of 2023 the Lula-ter government received the applause of the financial community for its constant and reliable participation in the most important international summits, from the G-20 to the COP, and above all for having brought home the highly anticipated reform of the tax system, which earned him as a Christmas present the improvement of the rating by Standard & Poor's, from BB- to BB. The markets certainly didn't even mind the centrist turn of the former union leader, as demonstrated for example by having given the green light to Petrobras to extract oil from the mouth of the Amazon, giving something to business in defiance of climate commitments. It is no coincidence that the energy giant of which the State holds 30% has just returned from an extraordinary year in terms of production, exports and the stock market, where ordinary shares gained more than 50%, reaching 40 reais per share. share, highest value since 2010. And it announced investments of over 3 billion dollars for new drilling between now and 2028, after having changed its policy on very generous dividends, at the behest of Lula himself.

Political uncertainty weighs on the Mexican stock market

Another stock exchange to follow, precisely because it is in the largest and most influential country among those that will vote in 2024, is that of Mexico, which in contrast with the ones mentioned so far ends the year in slight decline, with approximately -7,5%. What influences the Mexico City stock index is precisely thepolitical uncertainty: Andres Manuel Lopez Obrador's term is expiring and will not be able to run again. His presidency was in chiaroscuro: voters did not displease him, at least according to official polls, and he offered more than one side to his US neighbors, in particular on trade agreements and immigration, but he was unable to put an end to historical problems such as crime and corruption.

We vote in June and for the first time in compete for the position of president will two women: AMLO's chosen one, claudia sheinbaum, and the conservative of indigenous origin Xóchitl Galvez, who will lead the broad front of the opposition. The winner will therefore become the first female president in the history of Mexico.

Finally, the Chile, that is, one of the strongest economies in the area, but which has not yet recovered from the pandemic. Troubled by a long and unsuccessful process of constitutional reform, with two referendums rejected within a year, the country led by the socialist Gabriel boric However, it saw the stock market reach its all-time high this year, only to then lose a lot just before the November referendum and regain it around Christmas. In the 12 months, the Santiago Stock Exchange it ended up earning just over 21%.

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