As one can observe above, the difference between theMSCI Mexico Index’s price-to-earnings ratio on Oct. 21 was thewidest versus the MSCI Brazil Index’s since October 1998, wheninvestor concern mounted that Brazil would default after Russiahalted local debt payments two months earlier.
MSCI Brazil has plunged 25 percent this year, pushing itsprice-to-earnings ratio down to 8.5, according to data compiledby Bloomberg. The Mexico gauge has fallen 15 percent this year,leaving its ratio at 22.7.
“There is a lot of value in Brazil but it’s still a stock-pickers market,” Stacy Steimel, who manages $800 million ofLatin American stocks at PineBridge, said Oct. 21 in a telephoneinterview from Santiago. “Interest rates are coming down, andsome of the consumer names have been hit. There is suchincredible value.”