FidLo International Highlights Latin America’s Ascent in Global Derivatives Market
LONDON, UK / ACCESSWIRE / September 24, 2018 / Already an attractive destination for investors, Latin America is expected to become even more appealing given that Argentina, Brazil, and Ecuador have emerged from recession, commodity prices have rebounded, and inflation has abated. Driven primarily by Mexico, Colombia, Peru, and Paraguay, the region will return to economic growth in 2018 with a 1.3% expansion and follow this with 2.1% in 2019, according to a report from BBVA.
The International Monetary Fund (IMF) also has positive numbers for Latin America, projecting 2% growth in 2018 and 2.8% in 2019 (inclusive of the Caribbean region). Equally important is the steady rise of the middle class, with improving incomes having a favorable impact on the number of retail investors. As Latin America catches up on technological innovations, opportunities for online trading and investing are making it the object of attention for institutions and individuals from global regions where market maturity and stringent regulations have resulted in limited options. With strengthening economic fundamentals, quickly improving financial literacy, and favorable regulatory regimes, Latin America is seeing a notable rise in the number of investors and posting a steadily growing volume of online transactions, especially in terms of derivative financial instruments, notes leading UK-based investment broker FidLo International.
The global derivatives market is massive: some estimates put its value in the range of $542.4 trillion to $1.2 quadrillion. As their name indicates, derivatives are securities whose value is determined by that of an underlying asset or asset group, such as stocks, bonds, commodities, futures, swaps, options, currency or interest rates, and market indexes. One of the most popular trading instruments is a contract for difference (CFD), which allows an investor to use leverage and go either long or short on the value of the asset chosen. In many markets, however, CFDs are regulated to an extent that leaves few or no options for those wishing to engage in such trades. In contrast, Latin America offers multiple opportunities for investors interested in these instruments, FidLo International notes. Chile, one of the countries with the strongest economic outlook, has a robust over-the-counter (OTC) market, which is the preferred venue for trading CFDs. While Brazil does not allow such trades, investors have plenty of opportunities elsewhere in Latin America besides Chile: no specific regulations exist against these instruments in Peru, Bolivia, Ecuador, Venezuela, Colombia, Paraguay, the Dominican Republic, and Mexico.
Derivatives are enjoying a rise in popularity as investors in Latin America become more knowledgeable and gain experience. Institutional investors, for example, are making greater allocations to exchange-traded funds (ETFs), applying them to new asset classes and functions, according to Greenwich Associates. The market intelligence provider estimates that institutions in Latin America allocated 13.1% of their total assets to ETFs in 2017 compared to 7.6% in 2016. Moreover, the improving investment culture among the region’s market participants is shifting the balance in favor of local players, who are replacing foreign investors as the main driving force behind market activity and transaction volumes, as pointed out by BlackRock.
Incorporated in the UK, FidLo International is dedicated to helping clients build diverse portfolios and maximize investment returns with consideration for individual goals and risk tolerance. Using advanced technological solutions and a team of market experts, the company offers opportunities for trading in stocks, CFDs, and other financial instruments. FidLo International is a regulated entity in the UK, Cyprus, and the British Virgin Island.
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FidLo International Gains Prominence in a Steadily Expanding CFD Market: https://finance.yahoo.com/news/fidlo-international-gains-prominence-steadily-203000068.html
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SOURCE: FidLo International