RPT-Peru's stealth rally upstages emerging market rivals
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By Dion Rabouin
Aug 19 (Reuters) - Brazil and Argentina have seized the emerging markets spotlight in recent months thanks to investor-friendly political upheavals, but much smaller Peru is quietly stealing the show.
Peru's S&P Lima General Index has topped all global emerging markets in local currency terms in 2016, romping to a 58 percent gain and far outpacing the 33 percent rise for Argentina's Merval and the 37 percent jump for Brazil's Bovespa over the same period. (Graphic: tmsnrt.rs/2aW47eN)
In currency-adjusted terms, Peru is the world's No. 2 market after Brazil, which has benefited from a big rally in its currency, according to an MSCI ranking.
Beyond an economy that's grown steadily in recent years, some of the credit for the rally belongs to the emergence of Pedro Pablo Kuczynski, a former World Bank official and Wall Street banker popularly known as PPK, as a serious contender for the presidency earlier this year.
Even before he eked out a narrow run-off election victory in June, Kuczynski had lifted investors' hopes with a plan for infrastructure investment, small businesses assistance and jobs programs. The Lima General index rallied 8 percent when Kuczynski finished second in preliminary elections in April and leftist candidate Veronika Mendoza was knocked out of the race.
On Thursday, just a few weeks in office as president, he reiterated calls for lower taxes, saying his plan would boost government revenues by broadening the payer base.
With Kuczynski at the helm, "Peru is in the best shape that it has been in the last 50 or 60 years," said Javier Creixell, portfolio manager of Epiphany Funds' Latin America Fund in Dallas. Continuación...