Expectativas de suba del Merval en 5 años

Investors betting on Argentina's stock market could make a return of 258% in five years, according to analysts at Morgan Stanley.

The country is returning to economic and political normality after years in the capital markets wilderness following its 2002 debt default and financial collapse, Morgan Stanley said in a note to clients on Friday.

While a 258% return on Argentinian stock investments is the best-case scenario, the investment bank said a 133% return is the most likely.

"We believe the deepening of Argentina’s capital market will trigger roughly $230 billion (~8% of GDP p.a.) in net financing and foreign direct investment over the next five years, and we expect Argentina’s role and prominence in fixed income and equity investment portfolios to grow," the analysts said.

"The journey has just begun and it is not too late to buy Argentina: In our base case scenario, we forecast MSCI Argentina should reach circa 5,700 points by 2021YE (+133% in USD; +18% CAGR)."

The analysts said that returns could top 250% if economic reforms are implemented quickly: "In an optimistic scenario, the economy quickly normalizes and the government is able to implement far reaching structural reforms that lift potential real GDP growth to +4.0% per year."

"This backdrop would be extremely supportive for equities and we project MSCI Argentina to close to 8,800 points after 5 years (+258% in USD; +29% CAGR)," Morgan Stanley said.

If things do not go to plan, the most Morgan Stanley sees investors losing over that period is 18%, making the risk worth the potential reward.

Copiado de MORGAN STANLEY: Argentina's stock market could rocket as much as 258% in 5 years.