Who are the Best? Local Versus Foreign Analysts on Latin American Stock Markets

31 Pages Posted: 14 Dec 2001

See all articles by Jean-Francois Bacmann

Jean-Francois Bacmann

RMF Investment Management

Guido Bolliger

Asteria Investment Managers

Date Written: November 2001


This paper investigates the relative performance of local and foreign financial analysts on Latin American emerging markets. There is a strong evidence that foreign financial analysts outperform local analysts on these markets. Foreign analysts produce more timely and more accurate forecasts. A significant price reaction is observed following their downward forecast revisions. Therefore foreign investors do not necessarily need to open relations with local financial analysts when they want to trade on these markets. The results are consistent with previous evidence that documents a better information and greater sophistication on the part of foreign investors on overseas markets.

Keywords: Analysts' forecasts, home bias, international diversification, emerging markets, herding behaviour

JEL Classification: G14, G15, G24

Suggested Citation

Bacmann, Jean-Francois and Bolliger, Guido, Who are the Best? Local Versus Foreign Analysts on Latin American Stock Markets (November 2001). Available at SSRN: https://ssrn.com/abstract=294043 or http://dx.doi.org/10.2139/ssrn.294043

Jean-Francois Bacmann (Contact Author)

RMF Investment Management ( email )

Huobstrasse 16
8808 Pfaeffikon SZ
41 55 417 77 10 (Phone)
41 55 417 77 11 (Fax)

Guido Bolliger

Asteria Investment Managers ( email )

Rue du Rhône 62
Geneva, 1204

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