By Herbert Lash
NEW YORK, April 15 (Reuters) - Some on Wall Street don'tbuy the Sell Peru story. Its growth prospects are too enticingand the left-wing nationalist leading in the polls has pledgedto soften his stance if elected to the presidential palace.
Major U.S. fund managers invested in Peru are carefullyexamining the election campaign and weighing the outlook forthe Andean nation, which is growing at an almost double digitpace and reveling in a mining boom.
Ollanta Humala spooked investors when he surged to thefront in the first round of Peru's presidential race lastweekend. The country's stock market has plunged and thecurrency slumped on fears Humala, who was pardoned for a briefcoup attempt in 2000, will boost mining taxes and take overprivate companies.
Masha Gordon, head of emerging market equity strategy atPIMCO, which manages $1.2 trillion in assets, said Humala mightbe compelled to tone down his left-wing rhetoric, aimed at thelarge slice of voters not yet sharing in Peru's economic boom.
Humala has been signaling as much, with a key aide saying on Wednesdaythat his goal for Peru is economic stability and that he will not godown the road of left-wing leaders in Venezuela and Bolivia if he wins the June 5 run-off. For details see: [ID:nN13295500].
Gordon liked the low ratio of credit to the economy's sizein Peru, and calls the recent market sell-off enticing.
"When the market drops 14 percent, clearly that will garnerour interest," Gordon said. "After this drop, you can see themarkets are not trading at distressed levels, which is a goodsign. Investors are nervous, not panicked," she said.
Lima's general stock index .IGRA has tumbled almost 15percent since March 28, when Humala gained in opinion polls andfailed to calm investors' nerves after delivering what was thenconsidered the most moderate speech of his career.
Jacek Dzierwa, global strategist at U.S. Global Investorsin San Antonio, said he hopes Humala will compare the stridesPeru has made if he wins, keep the country's pro-marketpolicies and not "throw everything into the waste basket."
The market's dip might be a buying opportunity, albeit acalculated risk, said Dzierwa, who manages emerging market andcommodity-based equity assets.
"We will be watching because as I said, we are not pullingout, we don't want to panic," said Dzierwa, who like otherinvestors was surprised by Humala's surge in the polls.