New York - Institutional Investor Research Group and Reuters, the global
information, news and technology group, today published their inaugural
Reuters Institutional Investor Latin America Equities Survey. This is one of
a series of global equity market surveys being developed by Institutional
Investor Research Group and sponsored by Reuters.

A broad cross-section of financial market professionals participated in this
survey, which includes a profile of Institutional Investor magazine's 2002
Latin America Research Team, which was published in June. For the Latin
America Research Team, 355 individuals from 193 buy-side firms voted; 92 of
Latin America's largest quoted companies completed the corporate poll, and
83 analysts responded to the sell-side poll.

The Top Awards
Institutional Investor's Latin America Research Team: 1st Place (tied) -
Credit Suisse First Boston and J.P. Morgan

Reuters Institutional Investor Latin America Equities Awards: 1st Place
Winners -
Overall buy-side rankings:
Sell-side sales: J.P. Morgan
Sell-side trading & execution: Merrill Lynch

Overall company rankings:
The buy side: Capital Group

A Turbulent Year for Latin American Equities
The past year was a turbulent one for the Latin America equity markets. The
total market capitalization of the region's seven major stock exchanges fell
by a combined aggregate of 21 percent in 2001 [Source: Economica].
Liquidity, or the continuing lack thereof, is a key determinant of the these
markets' future direction. Companies must both provide free float
sufficient to draw big global shareholders and have access to adequate
financing. Strong trading volumes are essential to the sell side if the lure
of the region's rich commissions payout is to be compelling. And the major
buy-side institutions will need greater liquidity on local exchanges to
justify maintaining regionally dedicated funds.

Buy side shift to nondedicated assets
Voter firms' current Latin America assets are evenly split between dedicated
and nondedicated funds. However, over 70 percent are moving toward a more
nondedicated basis, largely into global emerging markets (GEM) and global
sectors (pages 16, 17). While country sectors retain favor with a plurality
of voters, regional sectors remain a compelling framework for funds still
committed to the region.

The Challenge to Companies: Competing for Globally Mobile Funds
With the movement toward nondedicated Latin America portfolios, companies
must demonstrate their strengths relative not just to domestic competitors,
but increasingly to companies across Latin America, as well as the whole of
EMEA and Asia.
Companies are therefore spending almost 30 percent of their time marketing to potential shareholders, especially those abroad. Many are spending more time courting U.S institutions than with their domestic buy-side base. Our findings reveal, however, that much of a typical Latin American company's listed equity is tied up in insider or cross-holdings. Just over 60 percent, on average, is available as free float. This constitutes a major limitation to companies' ability to expand their global investor base.

Pressures on the Latin America Sell-Side Franchise
Latin America can be a lucrative market for top sell-side firms. With an average of only nine firms being used by the buy side for research, the rewards for those that succeed are high. Almost 30 percent of buy-side commissions are paid out to the No. 1 firm and 75 percent to the top four. But steadily declining volume and reduced institutional commitment to the region have dulled the attractions of such rewards, and placed undeniable pressure on the viability of the dedicated Latin America equities franchise.

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