Only one month into the brand new yr and one portfolio supervisor is already assured that Argentina is “going to be an important story all through 2025.” “Argentina’s momentum story is implausible, so it moved from being my high contrarian thought in 2024, to one in all my high bets for this yr,” Malcolm Dorson, senior portfolio supervisor at International X ETFs advised CNBC Professional on Jan. 24. Dorson’s conviction within the Latin American nation is due partly to a “dramatic” drop in rates of interest in addition to declines in credit score spreads and the price of capital. The nation’s central financial institution lowered its benchmark rate of interest to 32% in December from a document excessive of 133% in October 2023. Argentina’s annual inflation fee hit 117.8% in 2024, almost 94 factors decrease than in 2023 . Argentina’s economic system is slated to broaden 5% this yr and 4.7% in 2026 after two years of recession, information from the World Financial institution exhibits. A lift from sectors like agriculture, power and mining, supported by macroeconomic stability are anticipated to drive that forecast in financial development, the World financial institution stated. “Every little thing appears good for Argentina: the economic system is bettering, bond yields are coming down and markets are choosing up,” Dorson stated. He added that the MSCI Argentina Index is buying and selling at 0.9 instances e book worth, implying that the nation’s shares are undervalued. The MSCI Argentina Index — which tracks the efficiency of enormous and mid-cap shares on the nation’s market — has gained 156.57% within the final 12 months, in accordance with FactSet information. For comparability, the MSCI Rising Markets index — which captures massive and mid-cap shares throughout 24 rising markets, together with Brazil, China and India — gained 13.81% throughout the identical interval. Dorson is especially within the power sector as the federal government “unlocks Argentina’s pure useful resource potential.” His high picks embrace YPF Sociedad Anonima and Vista Power which commerce on Argentina’s Buenos Aires Alternate and as American Depositary Receipts within the U.S. underneath the tickers YPF and VIST . Different shares on Dorson’s radar embrace Arcos Dorados Holdings , the grasp franchiser of McDonalds, throughout Latin America and the Caribbean, and e-commerce platform MercadoLibre , or what he calls “the Amazon of Latin America that everyone loves.” Greece: A implausible story Moreover Argentina, Dorson considers Greece a “implausible funding story.” “Greece is providing roughly 15% returns a yr for the foreseeable future. That’s primarily based off 10% earnings development plus a 67% dividend yield. Put that collectively and you’ll sit again and have draw back safety,” he stated. “With Greece, you have got a market that’s funding grade credit score, the quickest rising GDP in Western Europe, and you are still buying and selling beneath e book worth. Its a boring, good story that is good to sit down on.” Greece has emerged from a years-long debt disaster and is predicted to develop 2.2% this yr and a couple of.5% in 2026, in accordance with projections from the Organisation for Financial Co-operation and Improvement . Its credit standing was raised to funding grade by S & P and Fitch Rankings in 2023 whereas Moody’s has upgraded it to a notch beneath funding grade. The MSCI Greece Index monitoring the efficiency of enormous and mid-cap shares on the Greek market is up 17.26% within the final 12 months, in accordance with FactSet information. Dorson is especially bullish on Greek banks after a clear up of their stability sheets. Their asset high quality could be very secure “after securitizing their non-performing mortgage books and promoting them to different credit score managers and hedge funds,” he stated, naming Alpha Providers & Holdings as his high choose within the theme. He additionally likes toy retailer Jumbo, given its “potential from a speedy growth into underneath penetrated markets in Jap Europe,” and lottery and gaming firm Greek Organisation of Soccer Prognostics, or OPAP, which he describes as “very worthwhile and extremely patronized by locals.” India: An extended-term story In Asia, Dorson is betting on India over the long-term given its ” completely implausible structural setup .” “It’s a market that’s going to generate returns that I can spend money on my kids and grandchildren,” he stated. His conviction comes whilst India’s benchmark Nifty 50 and Sensex are hovering at greater than seven-month lows. The portfolio supervisor sees India as a beneficiary of the robust headwinds between the U.S. and China. He added that India — together with different rising markets — may even see an easing in financial coverage after “pricing in a stronger U.S. greenback and an incrementally hawkish U.S. Federal Reserve.” The monetary sector, particularly banks, stand out to him, provided that it’s a “levered play on the broad Indian market.” “Banks have been sensible and prudent in committing a powerful capex [capital expenditure] cycle. They have been investing in know-how and providing extra digital banking over the past 5 years, which is permitting them to chop expenditure, elevate revenues and enhance asset high quality,” Dorson defined. Banks are additionally “one of many few areas within the Indian market with comparatively engaging multiples,” he stated, naming HDFC , ICICI Financial institution and Federal Financial institution as his high bets within the theme.