Yield ahead.

Capital flows are back and Latin America is reaping its share. Globally, capital inflows towards emerging markets were expected to hit a seven-year high of US$279 billion in 2004, a 32% increase from 2003, according to the Institute of International Finance (IIF), a global association of financial institutions. In Latin America, capital inflows were expected to hit $26 billion in 2004, up slightly from 2003 but a 50% hike from 2002. The IIF expects the figure to jump by more than half this year,

A weak dollar and low yields in markets such as the United States have investors pumping their money into emerging markets for better returns. In Latin America, most of the countries have learned their lesson from the last decade, cutting down debt burdens and improving their economies.

"The experience of the 1990s has left indelible scars," says Walter Molano, a partner at BCP securities in Greenwich, Connecticut. High commodity prices have been pumping money into Latin America, fueling growth in domestic markets in already growing Latin American economies.