Bank of New York Mellon Corp., the world’s largest custody bank, expects Latin America to experience the biggest growth in financial assets over the next four or five years, according to James Palermo, vice chairman and chief executive officer of global client management.
Financial assets, such as stocks, bonds and bank deposits, will grow an average 11 percent to 13 percent in the region, Palermo said in a May 1 interview in Doha, Qatar. The Middle East and North Africa will experience 9 percent to 11 percent growth and the Asia and Pacific region will register 8 percent to 10 percent, he said.
Western European and North American assets will increase by 3 percent to 5 percent.
“Brazil is an extremely active market,” said Palermo, who said he was visiting Qatar as part of a regional trip to meet clients. “There is a lot of wealth being created in the region.”
Rio de Janeiro will host the soccer World Cup in 2014 and the Olympic games two years later and “their infrastructure- build plans are well under way,” he said.
Latin America and the Caribbean will register economic growth of 3.7 percent this year, outpacing the economies of the European Union, central and eastern Europe as well as the world average, according to International Monetary Fund data. Growth will be slower than in developing Asian countries, Sub-Saharan Africa, the Middle East and North Africa.
The MSCI Emerging Market Latin America Index (MXLA) has climbed 8.6 percent this year, compared with a 12 percent gain for the broader MSCI Emerging Markets Index (MXEF), according to data compiled by Bloomberg.
The economy of Brazil, the world’s seventh-biggest, grew 2.7 percent last year, the second-worst performance since 2003. The country’s growth rate will accelerate to 3.2 percent this year, according to the median estimate of about 100 economists in a central bank survey published April 30.
Growth in the Middle East, holder of more than half the world’s crude oil reserves, will “largely be energy related,” Palermo said.
BNY Mellon, which posted a 1 percent drop in profit in the first quarter, said last month that assets under custody and administration rose 4 percent to a record $26.6 trillion during the quarter, and assets under management climbed 6 percent to $1.3 trillion, also an all-time high.
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