Latin America Celebrates Bank Bailouts with Buy Binge; EMERGING MARKETS

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Byline: By Daniel Bases Reuters Correspondent

Stock and currencies in emerging markets have reacted favourably to the various bailout schemes orchestrated by governments in Europe and the United States.

The recapitalisation programmes have seen billions of dollars pumped back into the system to try and ease the global credit crisis.

In Latin America, the bank bailouts announced by the governments of Britain, Germany, France, Italy and other European nations, were greeted with a wave of buying.

MSCI's Latin American stock index surged 16.59 per cent or 337.40 points on Monday to 2370.61. Last week the index fell 27.58 decline.

The main MSCI emerging markets stock index, gained 43.75 points, or 7.39 per cent, to 635.65. Last week the index fell 20.2 per cent.

Mexico's benchmark IPC stock index rose 11.01 per cent to 22,095.89 points, its biggest single-day percentage gain since September 1998.

Neil Dougall, chief economist emerging markets at Dresdner Kleinwort in London, said: "What we are seeing is basically a feeling that the improvements in confidence that has come on the back of the measures announced over the weekend among G7 countries has certainly led to a very significant improvement in the near-term outlook at least.

"For the time being, things are looking definitely on a much better trajectory, but I think it would be foolish to believe there hasn't been damage done to growth prospects in Latin America as a result of the developments over the last week and prior to that."

Among regional initiatives, the Andean Development Corporation (CAF) said it is offering a total of EUR3. …