A top fund manager has identified "exciting growth prospects" for investors in Latin America.
Roger Guy, manager of Gartmore's European selected opportunities fund, has recently switched focus from the rapid economic growth that eastern and central European countries are experiencing to the other side of the Atlantic.
"While continental Europe offers plenty of attractive investment opportunities based on positive themes such as strong cashflows and mergers and acquisitions driven industry consolidation, we are always looking for catalysts that have the potential to increase a company's share price," he explained.
"In contrast to Europe's low inflationary environment and uninspiring gross domestic product growth, the economies of some Latin American countries offer exciting growth prospects.
"At the moment we're seeing some opportunities linked to the strong recovery in the region's economic fortunes, where structural changes and fiscal probity have increased stability in many nations."
Mr Guy also revealed which companies he has his eye on.
"Spanish telecoms group Telefonica is the largest phone company in South America and prospects for organic growth in this market look good. Independently of this, with positive attributes like a solid balance sheet and strong cashflow generation, the stock is already an attractive proposition," the fund manager said.
Banks with a South American flavour were also tipped by the investment expert.
"The outlook for banks such as BBVA and Santander with exposure to South American economies is especially strong. Reporting third quarter numbers this week, Santander said earnings from the region rose 17 per cent while BBVA has predicted that falling interest rates in Mexico will lead to a 25 per cent increase in lending in 2006."
And growth is set to continue as foreign investors look to cash in on rapid growth.
"The stock markets of South American countries such as Brazil have achieved excellent progress this year but European stocks with exposure to these economies have yet to catch up," Mr Guy concluded.