Bloomberg News

Peru Selloff on Humala Win Is Buying Opportunity, JPMorgan Says

June 06, 2011

June 6 (Bloomberg) -- Peru’s financial assets may offer a buying opportunity if markets tumble after a victory by Ollanta Humala in presidential elections, JPMorgan Chase & Co. said.

Humala, the former army rebel who advocates greater state control of the country’s natural resources, claimed victory after initial results showed he won more votes than Congresswoman Keiko Fujimori. Local investors expect markets to retreat if Humala wins, Ben Ramsey, an analyst at JPMorgan in New York, wrote in a research note.

“We would see a sharp selloff in Peru as a buying opportunity,” Ramsey wrote. “Humala would be more moderate than expected if elected -- if anything because he can ill afford to see Peru’s growth collapse given his intention to fight poverty more aggressively.”

Declines in Peruvian assets may be limited because local pension funds already have “underweight” holdings of bonds, while global investors have historically low positions in the country’s local and foreign-currency debt, Ramsey wrote.

“While we acknowledge that local investors in Peru expected a sharp selloff in the case of a Humala victory and they are the main drivers of Peruvian assets, we do not believe that the correction would be so severe,” Ramsey wrote.

--Editors: Stephen Kirkland, Gavin Serkin

To contact the reporter on this story: Michael Patterson in London at

To contact the editor responsible for this story: Gavin Serkin at

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