Note from one of the large world banksBelow is an interesting research . Provides some interesting points.
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There is often a division between the so called "good left" and "bad left" in Latin America. Good left is fiscally responsible, increases taxation enough to help social programs but also makes a big effort to hold back intervention as much as posisble. Bad left suppresses private industry in favor of populist programs.
Bad Left: Venezuela, Bolivia, maybe Ecuador, Nicaragua
Good Left: Argentina, Brazil, Chile (moreso before Pinera's election)
Bulwarks of the Right: Mexico, Colombia, Peru. This is why the US is so focused on Peruvian elections. They are losing their influence in the region.
Humala in 2006 vs Humala 2011: In 2006, Humala was much farther to the left. He talked about nationalization and did little to distance himself from Hugo Chavez. In the 2011 campaign, Humala moderated his views significantly, adopting the Lula model: (1) included technocrats among advisors, (2) signed a pact stating that he wouldn't nationalize any assets. (3) High-profile Right-wing players like Alejandro Toledo (former right-wing presidential front-runner) and Mario Vargas Llosa (pre-eminent right-leaning thinker in Peru) threw their support behind Humala over Fujimori.
Difference between Humala and "Bad Left" model: The biggest thing in Peru is that there is not an organized left-leaning political base. It was dismantled with an iron fist in the 1990's by Alberto Fujimori. Because of this weak base, Humala has a lot more wiggle room on policy than his counterparts in countries like Bolivia. If he softens his stance, there isn't an organized movement that will hold him accountable.
Even the most radical countries have tried to reconcile with business: Venezuela is the only one that hasn't welcomed foreign investment, but even they are feeling the pain now despite world class oil reserves. No govt wants to preside over an environment of political instability. Peru faced hyperinflation in the 1980's and the memories still sting, so there isn't much appetite for a big transformation of peruvian society.
** Bigger risk has nothing do to with Humala - Wealth Disparity: There is a legacy of exclusion in Peru, as private sector growth hasn't included indigenous people. In 2009, there were huge mobilizations that resulted in riots and 25 deaths. This happened near Puno, where Bear Creek has been having issues.
CONCLUSION: Buying opportunity in selected peruvian miners. The market has served a warning to Humala that if he takes a hard line on private industry, capital will flee the country. Once this passes, the exposed names should rally like they did after the initial April 14th election and like Brazil rallied after Lula came into power.
thanks Caroline