Marking its 10th anniversary, the Global Emerging Markets Corporate Conference gathered some 350 investors and 140 corporates for panel sessions and one-on-one meetings in Miami. The popularity of the J.P. Morgan event has tracked the growth of the asset class, which expanded from about $600 billion in early 2010 to $2.2 trillion currently.

In terms of risks, rising U.S. Treasury yields and a stronger U.S. dollar were cited as concerns, despite a recent dovish pivot by the Federal Reserve that has produced a favorable EM climate. A majority of attendees expect one interest rate hike this year by the Fed.

Latin America proved a particular focus for positive sentiment, with more than half of participants ranking it as the region in which they would likely increase corporate fixed income investment this year. This compared to a third of EM investors choosing Europe and a quarter opting for Asia.

On a country level, corporates from Brazil and Argentina were expected to provide the best returns globally in 2019 while Mexico ranked last.

From panel discussions with public officials, thought leaders and J.P. Morgan experts at the event, we examine the trends in four key Latin American countries.

Bullish on Brazil

With 37% of investors expecting Brazilian corporates to provide the best returns this year, Latin America’s largest economy remains a sector champion. Dominating the agenda for 2019 is Brazil’s highly anticipated Social Security reform, which sees the government proposing pension cuts to ease fiscal pressure.

Panelists agreed the reform would likely be approved by Congress in the second half of this year, but some expressed concern that the final version would be diluted, reducing its fiscal impact. However overall a consensus view was that conditions had never been as favorable: Opposition parties are weakened and the population is familiar with the reform after three years of discussion. President Jair Bolsonaro remains popular, but a possible future decline in his approval rating was cited as a risk.

In terms of the economy, experts were divided: Some pointed to fiscal crises in certain states holding back public spending and economic growth. Others suggested Brazilian corporates and consumers had successfully deleveraged and credit growth was picking up with expectations of future IPO and M&A activity.

37^_% of investors expect Brazilian corporates to provide the best returns this year

A pivotal election in Argentina

2019 sees Argentina go to the polls with President Mauricio Macri seeking re-election facing significant headwinds in Latin America’s third largest economy: Consumer confidence is at its lowest level since 2002, while employment, inflation and poverty data have all deteriorated since Macri took office—impacting his approval ratings.

Despite these unfavorable conditions, political consultants said Macri remains the favorite to win the election in October. This can be partly explained by the composition of Argentina’s electorate: A third of voters are supporters of former leftist President Cristina Fernandez de Kirchner, a third are pro-Macri and a third are undecided. If Macri can maintain his core support, he can move to the second round and defeat Kirchner, who remains a polarizing figure but the most powerful of the Peronist leaders. If the Peronist factions could agree on a more moderate candidate, consultants said Macri would likely be defeated.

His re-election would pave the way for a greater opening of Argentina’s economy and possible free trade deals, according to the experts. If Kirchner leads the election, panelists said she would likely compromise on some political ideals to attract needed investment in energy pipelines. Both candidates will likely have limited room for maneuver given the macro conditions facing Argentina.