ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 13

Banco BTG Pactual S.A. does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of
interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

Equity Research
Alonso Aramburu
New York BTG Pactual US Capital LLC
alonso.aramburu@btgpactual.com
+1 646 924 2471
Cesar Perez-Novoa
Chile - BTG Pactual
cesar.perez@btgpactual.com
+562 2490 5012
Felipe Ucros
New York BTG Pactual US Capital LLC
felipe.ucros@btgpactual.com
+1 646 924 2474
Juliana Aguilar
Colombia - BTG Pactual
juliana.aguilar@btgpactual.com
+574 356 7413





January 5SIM
TM
(5 Stock Ideas for the Month)

Weaker tailwinds, but Andean economies should continue to outperform
2014 is starting off with two global trends that are likely to play out for a while: (i)
higher rates in the US and (ii) growth in China that is stable but weaker than in the
previous decade. For Andean countries (and most of Latam), these trends mean
slower GDP growth and further currency pressure, with the latter likely magnified by
monetary policies that are either looser than before (in Chile and Peru) or already
loose (in Colombia). Overall, GDP growth in the Andes should continue to outpace
Latam, but tailwinds are unlikely to be as strong as in recent years. In this scenario,
we favor companies with USD revenues, exporters, and commodity buyers.
Chile: Valuation is limiting downside; waiting for cabinet appointments
We are not ruling out a possible rebound in Chilean equities from a 4-year valuation
low, and market-friendly cabinet appointees could be a trigger. We also think that for
some sectors, such as banks, margin tailwinds will lead to good short-term earnings
momentum. However, we believe structural headwinds (higher wages, energy prices
and taxes) and a slower GDP expansion will keep earnings growth subdued in 2014.
A potentially weaker CLP adds downside to USD returns. Copec is still our only pick.
Peru: GDP regaining momentum; keeping Credicorp and Graa y Montero
After a period of deceleration, Perus GDP growth appears to be picking up again.
With several concessions granted in December and the approval to sell up to a 49%
stake in Perus state-owned oil company, the government is also mounting efforts to
boost business confidence and promote investment. We think this trend will continue
in the short term US$7.0bn+ of projects are scheduled to be awarded in 1Q14. We
also expect the PEN to be more defensive than neighboring currencies due to active
CB intervention. Credicorp and Graa y Montero remain our top names.
Colombia: Construction driving GDP growth; Adding Avianca and Cem. Argos
Large caps Ecopetrol and Bancolombia have weighed on the market in recent
weeks, despite better-than-expected GDP figures. While growth has been highly
concentrated in construction, we think economic momentum provides a positive
setting for earnings in 2014. Though we still like Davivienda and Nutresas earnings
dynamics, we are replacing them with Avianca and Cementos Argos, as we see
better operating trends and more visible catalysts for them in 2014.

Table 1: Andean/Southern Cone 5SIM
TM
Portfolio for January 2014
Source: BTG Pactual. Cementos Argos multiples are adjusted for portfolio holdings.
Bank
Rating Ticker
Weight
(%)
3M ADTV
(US$ mn)
Market Cap
(US$ mn)
P/E
2014E
EV/EBITDA
2014E
Avianca Holdings Buy AVH US 20% $17.8 $1,933 7.0x 6.3x
Cementos Argos Buy CEMARGOS CB 20% $3.4 $6,912 26.6x 9.0x
Copec Buy COPEC CI 20% $8.3 $19,224 18.5x 12.0x
Credicorp Buy BAP US 20% $45.7 $10,587 12.3x NA
Graa y Montero Buy GRAM US 20% $1.8 $2,370 18.8x 7.7x


Andean Region
Strategy
SectorNote
07 January 2014
The Andean/Southern Cone 5SIM
TM



The Andean/Southern Cone
5SIMTM
07 January 2014 page 2

Portfolio Strategy
2013 was a weak year for Latam equities, due largely to lower commodity prices,
economic deceleration, and weaker currencies. Those countries with the greatest
exposure to commodities Peru, Brazil and Chile were the most affected. Though
Colombia was also in negative territory, it outperformed its Andean peers, as it was
the only country with accelerating GDP growth in 2013. To a lesser degree, we
believe Colombias closer ties to the US (~35% of exports) also played a role in its
relative performance. The benefit of US exposure and a more stable currency was
evident in Mexico, the best Latam market in 2013 (though it underperformed on the
GDP front).
In 2014, we expect many of these dynamics to continue. Some of the tailwinds from
the last ten years (currencies, commodity prices, and rates) are unlikely to blow as
strongly in 2014 and may even become headwinds in some cases. We believe these
conditions will continue to merit attention when evaluating both bottom-up dynamics
for stock selection and top-down trends for country allocation. GDP growth in the
Andes should continue to outpace Latam overall, but trends differ from country to
country.
After a period of deceleration, especially noticeable in 3Q13, Perus GDP growth
appears to be picking up speed. 4Q13 GDP growth should top 5.5% after growing
4.4% in 3Q13, and the country is estimated to grow the fastest in the region in 2014
(we are modeling for 5.3%). With several concessions granted in December, a few
more to follow in 1Q14 (including the US$6.5bn Line 2 for the Metro), and the
approval to sell up to a 49% stake in Perus state-owned oil company, the
government is also mounting efforts to boost business confidence and promote
investment.
In Colombia, GDP has posted better-than-expected growth for two consecutive
quarters and is starting 2014 with the strongest economic momentum among the
three countries. And though much of this momentum is due to robust construction
activity (up 21% y/y in 3Q13), we think the setting is favorable for earnings across
domestic demand industries in 2014.
In Chile, the latest data (including the lower-than-expected 2.8% Imacec print for
November) point to a continued economic deceleration in 4Q13, with GDP growth
sinking below the 4% floor seen in 2Q13 and 3Q13. We expect Chile to grow more
slowly (we forecast 3.8%) than Colombia or Peru in 2014 and think its economic
momentum is also the weakest of the three.
By sector, we think a spate of infrastructure projects announcements will benefit
cement and construction names in Peru and Colombia in 2014. An improving
operating environment should also boost profitability for banks in Peru, due to a
greater focus on efficiency and risk, while Chilean banks should benefit from lower
rates and higher expected inflation.
From a valuation perspective, both Chile and Colombia (ex-oil) are the most attractive
markets relative to historical multiples. Both are trading at 3-year lows, but we think
Colombia is better positioned to re-rate in light of the better macro momentum,


The Andean/Southern Cone
5SIMTM
07 January 2014 page 3

potentially favorable political news (signing of peace agreement and reelection of
Santos), and closer ties to the US. On an absolute basis, all three markets are trading
at very similar levels, which also explains why we favor Colombia and Peru relative to
Chile for their better economic momentum. We also like Peru from a USD-return
perspective, since we think that in a scenario of ongoing pressure for Latam
currencies, the PEN is likely to outperform on the back of the likely active intervention
of the Central Bank.
Chart 1: Chile 5-Year Historical Forward P/E

Source: BTG Pactual and Bloomberg

Chart 2: Colombia 5-Year Historical Forward P/E (ex-oil)

Source: BTG Pactual and Bloomberg. Adjusted for GEA portfolio holdings

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The Andean/Southern Cone
5SIMTM
07 January 2014 page 4

Chart 3: Peru 5-Year Historical Forward P/E (ex-mining)

Source: BTG Pactual and Bloomberg
Our portfolio features two changes this month, both in Colombia, as we are replacing
Banco Davivienda and Nutresa with Avianca Holdings and Cementos Argos,
while Credicorp and Graa y Montero remain our preferred names in Peru. In Chile,
we still have only one pick Empresas Copec reflecting our less favorable view of
the market despite a historically low valuation.
In December, we added coverage of Avianca Holdings (Renato Mimica: Buy), taking
our coverage in Chile, Peru and Colombia to 54 companies.
Chile: Post-Election Update
We are maintaining our relative underweight stance on Chile, as we are awaiting a
clearer picture of the risks likely to be associated with the implementation of
President-elect Michelle Bachelets social agenda and the implications for taxes,
specific sectors, and state involvement in strategic areas, such as healthcare and
pensions. Granted, the business and political communities have broadly discussed
the proposed reforms, but we would like to see the technical aspects of
implementation, especially those associated with taxation. Currently, the market is
factoring into financial assets a proposed increase in the corporate tax rate to 25% in
annual increments of 125bps, but it is not pricing in potential sector-specific taxes.
Between now and March 10, 2014 (when the Piera administration completes its 4-
year term), we expect Chiles domestic financial market to be guided by (i) any
agenda details that add to the 200 pages Ms. Bachelet has published so far, and (ii)
her cabinet appointments. In our opinion, her appointments will be a crucial factor for
investors, with the key name being Finance Minister. We believe Bachelets roster will
most likely be released in mid-January.
Several names have surfaced in the press. Perhaps the most likely candidate for
Finance Minister is Alberto Arenas, 48, a Pittsburgh University PhD and politician
who served as budget director at the Finance Ministry in Bachelets 2006-10
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The Andean/Southern Cone
5SIMTM
07 January 2014 page 5

administration. He is also one of her most trusted advisors and is seen as the public
face of her economic program. Other names mentioned in the media include former
budget director Mario Marcel, former Lagos-era Finance Minister Nicolas
Eyzaguirre, and former Central Bank President Jose de Gregorio. The latter two are
seen as moderate and thus in our view likely to have a calming effect on the capital
markets. Jose Goni, a former Defense Minister in Bachelets first administration, is
seen as a potential candidate for Foreign Minister; and for the Energy Ministry a
critical post in light of Chiles need for an urgent revamp of its energy policy the
leading name is currently Eduardo Bitran.
We continue to assume, as a base case, that high-caliber professionals will be
appointed to the key economic and financial posts.
Our assessment is that the new administration has the power to relatively quickly
enact most of the reforms it has proposed so far (with the exception of changes to the
constitution, which we would not expect to start until 2H14), since Ms. Bachelets
Nueva Mayora coalition has nearly four-sevenths of Congress and some
independent members may provide support. That said, she may frequently need the
support of right-of-center groups to get her legislation passed.
We expect her to avoid an aggressive approach, since she will have to deal with her
opposition for four years and any serious controversy might run the risk of a
legislative stalemate at some point in that time. We think success will require
moderation and savvy political skills which might involve toning down some of her
proposals.
We believe her relationship with the private sector will also be a moderating influence:
she will inherit a more slowly growing economy, and most of her agenda requires
massive funding. We believe it is in her best interest to keep the private sector as a
dynamo behind investment: if the private sector senses more state supervision or
involvement, domestic investment might slow and put her ambitious program at risk.
And she will want to deliver on her promises if she cannot, we would expect her to
have to govern with a low approval rating, which was in fact how she began her
previous term in 2006.
As a result, we expect her to work urgently but diplomatically to submit proposals to
Congress from Day One, possibly passing most of the key non-constitutional items in
her first 3 months. Regarding the approach her administration will take to the
constitutional changes she has put forward, we do not expect more details until after
she takes office. The market has voiced some concern about these factors, and
though we think it has currently priced in most of them, we do not rule out some
subsequent volatility in the next 3 months. At the same time, there is also the
possibility of such changes being shelved as too controversial, either temporarily or
more permanently.



The Andean/Southern Cone
5SIMTM
07 January 2014 page 6

Table 2: Chile, Colombia and Peru Coverage Universe, December 31, 2013

Source: BTG Pactual. Cementos Argos and Nutresa multiples are adjusted for portfolio holdings.
Bloomberg BTG Pactual Target Price Market Cap 3M ADTV
31-Dec-13 Ticker Rating Price (Listing FX) (US$ mn) (US$ mn) 2013E 2014E 2013E 2014E 2013E 2014E
BANKS
Banco Santander Chile BSAC US Neutral CLP $34.00 CLP $31.48 $11,700 $7.6 15.5x 12.3x 2.5x 2.3x 17.1% 19.5%
Bancolombia CIB US Neutral COP $33,080 COP $23,440 $10,348 $10.6 11.5x 8.5x 1.6x 1.4x 14.5% 17.7%
Credicorp BAP US Buy USD $161.00 USD $132.73 $10,587 $45.7 17.6x 12.3x 2.5x 2.1x 14.8% 19.3%
Banco Davivienda PFDAVVND CB Buy COP $30,100 COP $23,660 $5,443 $2.2 12.9x 9.8x 1.7x 1.5x 14.3% 16.6%
Corpbanca CORPBANC CI Buy USD $6.70 USD $5.75 $3,859 $6.8 13.3x 8.9x 1.4x 1.3x 11.5% 15.2%
IFS IFS PE Buy USD $34.00 USD $31.00 $2,902 $1.0 10.9x 10.6x 2.7x 2.4x 23.8% 23.8%
BANK AVERAGE $7,473 $12.3 13.6x 10.4x 2.1x 1.8x 16.0% 18.7%
1 2 3 4 5 6 7 8 9 10 11
Bloomberg BTG Pactual Target Price Market Cap 3M ADTV
31-Dec-13 Ticker Rating Price (Listing FX) (US$ mn) (US$ mn) 2013E 2014E 2013E 2014E
NON-BANK FINMNCIALS
Bolsa de Valores de Colombia BVC CB Neutral COP $26.0 COP $22.4 $217 $0.5 19.4x 20.1x 9.9x 9.0x
NON-FINMNCIALS
Aerospace and Transportation
LATAM Airlines LAN CI Restricted USD $16.31 $12.6 - - - -
Avianca Holdings AVH US Buy USD $23.00 USD $15.44 $1,933 $17.8 7.7x 7.0x 6.7x 6.3x
Average $1,933 $15.2 7.7x 7.0x 6.7x 6.3x
Basic Materials
Southern Copper SCCO US Buy USD $45.00 USD $28.71 $24,404 $51.6 10.8x 9.0x 6.8x 5.7x
Cerro Verde CVERDEC1 PE Neutral USD $29.60 USD $24.50 $8,576 $0.1 14.5x 13.3x 7.4x 7.2x
Sociedad Quimica y Minera SQM/B CI Buy USD $45.00 USD $25.88 $6,812 $18.8 12.7x 13.7x 8.4x 8.1x
Buenaventura BVN US Neutral USD $16.00 USD $11.22 $2,855 $26.7 9.2x 6.9x 9.8x 6.3x
Volcan VOLCABC1 PE Buy PEN $1.60 PEN $1.14 $1,524 $0.7 11.9x 13.5x 4.4x 4.6x
Minsur MINSURI1 PE Buy PEN $1.84 PEN $1.43 $1,474 $0.7 7.2x 6.7x 4.2x 3.6x
Milpo MILPOC1 PE Neutral PEN $3.80 PEN $2.11 $843 $0.2 15.0x 9.0x 4.8x 4.7x
El Brocal BROCALC1 PE Sell PEN $9.60 PEN $10.70 $427 $0.1 NM 16.4x 16.5x 5.6x
Average $5,864 $12.4 11.6x 11.1x 7.8x 5.7x
Conglomerates
Grupo Argos GRUPARG CB Neutral COP $24,700 COP $19,440 $7,914 $2.3 35.5x 17.2x 8.4x 7.0x
Construction, Infrastructure and Real Estate
Cementos Argos CEMARGOS CB Buy COP $10,900 COP $9,800 $6,912 $3.4 63.5x 26.6x 12.7x 9.0x
Graa y Montero GRAM US Buy USD $25.00 USD $21.23 $2,370 $1.8 22.2x 18.8x 8.2x 7.7x
Parque Arauco PARAUCO CI Buy CLP $1,500 CLP $990 $1,372 $2.8 13.4x 11.8x 13.7x 11.9x
Cementos Pacasmayo CPAC US Buy USD $15.30 USD $11.84 $1,378 $0.3 20.3x 17.7x 11.8x 10.8x
Average $3,008 $2.1 29.9x 18.7x 11.6x 9.8x
Energy
Ecopetrol EC US Neutral USD $50.00 USD $38.45 $79,047 $17.8 11.6x 14.5x 5.6x 6.2x
Pacific Rubiales PRE CN Buy CAD $31.10 CAD $18.34 $5,573 $32.4 18.5x 32.5x 3.7x 2.9x
Petrominerales PMG CN Neutral CAD $7.40 CAD $12.26 $975 $29.7 47.1x NM 3.9x 5.0x
GeoPark GPK LN Buy GBP $8.55 GBP $6.08 $438 $0.1 9.1x 10.7x 4.3x 4.2x
Canacol CNE CN Neutral CAD $7.00 CAD $7.13 $580 $1.9 NM 17.1x NM 7.0x
Average $17,322 $16.4 21.6x 18.7x 4.4x 5.1x
Food and Beverages
Nutresa NUTRESA CB Buy COP $30,800 COP $26,440 $6,305 $2.4 22.7x 20.2x 11.7x 9.6x
Embotelladora Andina ANDINMB CI Neutral CLP $3,200 CLP $2,888 $5,392 $1.3 24.6x 20.7x 12.3x 10.4x
Cia de Cervercerias Unidas CCU CI Buy CLP $8,250 CLP $6,870 $4,316 $11.2 18.8x 16.8x 8.4x 8.6x
Alicorp ALICORC1 PE Neutral PEN $9.70 PEN $9.10 $2,781 $0.7 28.6x 21.5x 13.3x 11.7x
Concha y Toro CONCHA CI Neutral CLP $1,000 CLP $935 $1,378 $1.2 21.4x 16.8x 16.1x 12.0x
Average $4,034 $3.4 23.2x 19.2x 12.4x 10.4x
Healthcare
CFR Pharmaceuticals CFR CI Buy CLP $160.0 CLP $130.0 $2,158 $1.9 21.0x 14.6x 14.1x 11.4x
Industrial
Enaex ENMEXCI Neutral CLP $6,440.0 CLP $5,500.0 $1,334 $0.1 14.1x 12.3x 9.6x 9.0x
Ferreycorp FERREYC1 PE Buy PEN $2.60 PEN $1.93 $652 $0.7 12.7x 8.3x 6.0x 5.1x
Average $993 $0.4 13.4x 10.3x 7.8x 7.0x
Pulp & Paper
Copec COPEC CI Buy CLP $9,046 CLP $7,499 $19,224 $8.3 20.7x 18.5x 12.2x 12.0x
Empresas CMPC CMPC CI Neutral CLP $1,725 CLP $1,519 $7,115 $4.3 27.1x 29.0x 10.5x 11.1x
Average $13,169 $6.3 23.9x 23.8x 11.3x 11.6x
Retail
S.A.C.I. Falabella FALAB CI Neutral CLP $6,000 CLP $5,098 $24,318 $12.7 25.2x 21.5x 16.2x 14.0x
Cencosud CENCOSUD CI Neutral CLP $2,225 CLP $2,089 $11,657 $8.3 29.0x 18.0x 10.5x 9.3x
Almacenes Exito EXITO CB Neutral COP $34,000 COP $30,000 $6,959 $2.9 31.0x 27.8x 12.8x 11.4x
InRetail INRETC1 PE Neutral USD $21.00 USD $15.90 $1,635 $0.3 47.6x 23.8x 12.1x 10.4x
Forus FORUS CI Buy CLP $3,445 CLP $2,810 $1,432 $1.2 20.7x 18.3x 14.8x 13.2x
La Polar NUEVAPOL CI Buy CLP $180 CLP $105 $207 $0.8 NM 10.5x NM 11.1x
Average $7,701 $4.4 30.7x 20.0x 13.3x 11.6x
Telcos & IT
Entel ENTEL CI Neutral CLP $11,000 CLP $7,886 $3,679 $4.8 14.8x 13.7x 4.4x 4.2x
Sonda SONDA CI Buy CLP $1,900 CLP $1,329 $2,283 $2.9 21.4x 18.7x 9.0x 8.0x
Average $2,981 $3.8 18.1x 16.2x 6.7x 6.1x
Utilities
Enersis ENERSIS CI Buy CLP $204 CLP $172 $16,606 $11.0 11.7x 11.0x 4.5x 4.4x
Endesa ENDESA CI Buy CLP $960 CLP $783 $12,673 $8.9 18.6x 15.5x 8.4x 7.5x
AES Gener AESGENER CI Neutral CLP $355 CLP $308 $4,898 $2.5 25.4x 19.9x 11.8x 11.6x
Colbun COLBUN CI Neutral CLP $155 CLP $127 $4,400 $1.6 28.4x 17.6x 12.7x 8.6x
Aguas Andinas AGUAS/A Buy CLP $358 CLP $346 $4,171 $3.2 15.0x 13.7x 10.4x 9.8x
Isagen ISAGEN CB Neutral COP $3,217 COP $3,250 $4,592 $2.0 20.1x 19.4x 16.3x 13.6x
Celsia CELSIA CB Neutral COP $6,600 COP $5,680 $2,118 $1.9 14.0x 13.4x 7.3x 7.2x
Inv. Aguas Metropolitanas IAM CI Buy CLP $988 CLP $942 $1,858 $1.1 13.9x 12.6x 6.1x 5.7x
E-CL ECL CI Buy CLP $1,145 CLP $799 $1,660 $1.9 20.3x 16.7x 8.2x 7.5x
Average $5,886 $3.8 18.6x 15.5x 9.5x 8.4x
NON-FINMNCIAL AVERAGE $6,765 $6.8 20.9x 16.3x 9.6x 8.3x
P/E P/BV ROE (%)
P/E EV/EBITDA


The Andean/Southern Cone
5SIMTM
07 January 2014 page 7

OUR PICKS FOR JANUARY 2014
Avianca Holdings (20%): Buy (Renato Mimica/Felipe Nussli). Our positive view is
based on (i) AVHs leading position and track record in high-growth markets, (ii)
robust earnings momentum with an upward trend in profitability (we expect Q4 to be
another strong quarter); (iii) revenue power in the passenger segment and great
potential to grow the cargo and ancillary lines further; (iv) a focus on cost cuts and
fleet optimization, which should support a further expansion in profitability; and (v) a
very discounted valuation, trading at just over 7x P/E for 2014.
Credicorp (20%): Buy (Alonso Aramburu/Felipe Ucros). Credicorps earnings have
been very volatile in the last 12 months, with heavy FX losses, rapid growth in
expenses, and NPLs that have spiked in two different segments (credit cards and
SME). We expect the company to adopt a more controlled approach to growth next
year, where risk and efficiency will be more relevant components of the banks growth
strategy. Under this new focus, we think earnings visibility will become clearer. We
think the upside risk to profitability comes mainly from efficiency gains. Management
believes the efficiency ratio at BCP can improve from ~50% to the mid-40s (we
forecast efficiency improving 200bps in the next 2 years), but the goal is to control
costs at the whole group, not just at the bank.
Copec (20%): Buy (Cesar Perez-Novoa/Alex Sadzawka). We expect rapid growth in
both its forest products and fuel distribution divisions. In forest products, we expect
stronger performance in 1Q14 with: the startup of the Montes del Plata pulp mill in
Uruguay; the continued ramp-up of its panels mills (a volume driver in 3Q); and the
Nueva Aldea plywood facility. In Copecs fuels business, we are already seeing the
expected high volume growth both in Chile (including Abastible and Metrogas) and,
particularly, in Colombia where we expect high-single-digit volume growth to be
sustained. We believe the market is beginning to price in the potential for growth we
flagged in October, but that there is still some distance to go.
Graa y Montero (20%): Buy (Dario Valdizan/Cesar Perez-Novoa). Investor
perception of GRAM depends mainly on the economy of Peru, and, to a lesser extent,
of Chile, in addition to GRAMs ability to win projects and execute them well. Perus
government has bet on its ability to successfully tender projects totaling US$10bn
over that period. GRAMs capital increase gives it the firepower for the forthcoming
concession tender rounds in Peru. We see as potential catalysts for the shares: (i)
GRAM's ability to win the project for Lima's Metro Line 2 (US$6.5bn) and (iii) the
finalization of the licenses for Cuartel San Martin. We also see two general value
perception drivers: (a) synergies from the new acquisition in Chile; and (b) an
improvement in margins from contract structure adjustments.
Cementos Argos (20%): Buy (Felipe Ucros/Gordon Lee). Our view of the stock is
mainly driven by positive and resilient leading permit data in the construction sector in
Colombia, which leads us to believe cement consumption will continue its growth
trend well into 2014. In addition, we see a continuation of the housing rebound in the
US, a drive for operational efficiency at the company and a relatively attractive
valuation. Possible catalysts in the near term include i) the initiation of infrastructure
concession awards as early as February, ii) a confirmation of Mayor Petros


The Andean/Southern Cone
5SIMTM
07 January 2014 page 8

destitution, iii) a possible reversal of the new POT in Bogota and iv) a deployment of
M&A cash raised in the recent offering. However, the name is not risk-free. The
Panama Canal is nearing a possible halt in construction as concessionaires and the
Panamanian government resolve a cost overrun dispute and Bogota residential
permit numbers have been disappointing since the POT was instituted.
Table 3: Andean/Southern Cone 5SIM
TM
Portfolio for January 2014
Source: BTG Pactual. Cementos Argos multiples are adjusted for portfolio holdings.



















Weight
(%)
Rating Ticker
3M ADTV
(US$ mn)
Market
Cap (US$
mn)
P/E
2013E
P/E
2014E
EV/EBITDA
2013E
EV/EBITDA
2014E
P/BV
2013E
P/BV
2014E
Avianca Holdings 20% Buy AVH US $17.8 $1,933 7.7x 7.0x 6.7x 6.3x NA NA
Cementos Argos 20% Buy CEMARGOS CB $3.4 $6,912 63.5x 26.6x 12.7x 9.0x NA NA
Copec 20% Buy COPEC CI $8.3 $19,224 20.7x 18.5x 12.2x 12.0x NA NA
Credicorp 20% Buy BAP US $45.7 $10,587 17.6x 12.3x NA NA 2.5x 2.1x
Graa y Montero 20% Buy GRAM US $1.8 $2,370 22.2x 18.8x 8.2x 7.7x NA NA


The Andean/Southern Cone
5SIMTM
07 January 2014 page 9

December Portfolio Performance
In December, our 5 SIMTM portfolio was up 2.8%, outperforming both the Liquidity
Weighted Index (+2.3%) and the MSCI Rebalanced Index (-0.8%) as shown in the
chart below.
Chart 4: Andean/Southern Cone 5SIM
TM
December 2013 Relative Performance
Source: BTG Pactual and Bloomberg.
MSCI Rebalanced Index = MSCI LatAm stripped of Brazilian and Mexican names and reweighted proportionally.
Liquidity Weighted Index = volume-weighted index of all our Peru, Colombia and Chile coverage plus all other
stocks in those markets with an ADTV above US$1.0mn.

Chart 5: Andean/Southern Cone 5SIM
TM
December 2013 Portfolio Performance
Source: BTG Pactual and Bloomberg
96.0
97.0
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99.0
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104.0
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MSCI Rebal Liq Weight Index 5SIM Andean
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12.0%
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0.0%
2.0%
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6.0%
8.0%
10.0%
12.0%
14.0%
Davivienda Copec Nutresa Credicorp Graa y Montero


The Andean/Southern Cone
5SIMTM
07 January 2014 page 10

Inception to Date (March 6
th
2013) Portfolio Performance
Since inception, our 5 SIM
TM
portfolio is down 11.8%, outperforming both the Liquidity
Weighted Index (-27.6%) and the MSCI Rebalanced Index (-26.2%) as shown in the
chart below.
Chart 6: Andean/Southern Cone 5SIM
TM
Inception to Date Relative Performance
Source: BTG Pactual and Bloomberg
















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MSCI Rebal Liq Weight Index 5SIM Andean


The Andean/Southern Cone
5SIMTM
07 January 2014 page 11

A Recap of December
In Chile, both the MSCI and the IPSA had a negative performance for the second
consecutive month, decreasing 1.8% and 1.1%, respectively. Telecom (-4.2%),
Beverages (-3.6%) and Retailers (-2.8%) were the worst performing sectors, with La
Polar (-25.5%), Hites (-7.4%) and Andina (-7.3%) as the worst performing stocks.
Fishing (+7.4%) and Healthcare (+5.1%) were the best performing sectors, the latter
driven by Cruz Blancas outperformance (+27.6%) after the announcement that Bupa
Sanitas will launch a tender offer for up to 56% of Cruz Blanca at CLP$525/share.
Chart 7: Chile Stock Performance, December. 2013
Source: Bloomberg. Returns in USD
In Colombia, the MSCI dropped 2.4%, being the worst in the Andean Region, while
the local IGBC posted a 1.0% loss. Underperformance was mainly driven by
Ecopetrol (-5.9%), after the company announced its Capex for 2014, Pacific Rubiales
(-6.5%) and Bancolombia (-5.3%). Canacol (+43.9%) was the best performer in
December, thanks to positive data from its Leono-1 well, followed by ETB (+12.8%)
and ISA (+5.7%).
Chart 8: Colombia Stock Performance, December. 2013
Source: Bloomberg. Returns in USD
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IGBC: -1.0%


The Andean/Southern Cone
5SIMTM
07 January 2014 page 12

In Peru, both the MSCI (+5.2%) and the IGBVL (+3.7%) were the best performers of
Latam last month, recovering some of Novembers losses. Growth was driven by
miners and internal demand driven names, with Cementos Pacasmayo (+8.7%),
Graa y Montero (+8.3%), Banco Continental (+6.4%), Alicorp (+5.3%), among
others, outperforming last month; Southern Copper (+14.4%) was the best performer.
On the negative side, Relapasa (-9.0%), Buenaventura (-4.9%) and Corp. Lindley (-
3.3%) were the worst performers in December.
Chart 9: Peru Stock Performance, December. 2013
Source: Bloomberg. Returns in USD



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The Andean/Southern Cone
5SIMTM
07 January 2014 page 13


Required Disclosures

This report has been prepared by BTG Pactual US Capital LLC.
The figures contained in performance charts refer to the past; past performance is not a reliable indicator of future results.

BTG Pactual
Rating
Definition Coverage *1 IB Services *2
Buy Expected total return 10% above the companys sector
average.
52% 48%
Neutral Expected total return between +10% and -10% the
companys sector average.
42% 44%
Sell Expected total return 10% below the companys sector
average.
6% 25%

1: Percentage of companies under coverage globally within the 12-month rating category.
2: Percentage of companies within the 12-month rating category for which investment banking (IB) services were provided within the past 12 months.
Absolute return requirements
Besides the abovementioned relative return requirements, the listed absolute return requirements must be followed:
a) a Buy rated stock must have an expected total return above 15%
b) a Neutral rated stock can not have an expected total return below -5%
c) a stock with expected total return above 50% must be rated Buy

Analyst Certification

Each research analyst primarily responsible for the content of this investment research report, in whole or in part, certifies that:
(i) all of the views expressed accurately reflect his or her personal views about those securities or issuers, and such recommendations were elaborated independently, including in relation to BTG
Pactual US or its affiliates, as the case may be;
(ii) no part of his or her compensation was, is, or will be, directly or indirectly, related to any specific recommendations or views contained herein or linked to the price of any of the securities
discussed herein.
The research analyst responsible for this report is registered/qualified as a research analysts by FINRA.
It is possible that research analysts contributing to this report are employed by a non-US broker-dealer. In this case the analysts will not be registered/qualified as research analysts under FINRA
rules and therefore will not be subject to the restrictions contained in the FINRA rules regarding communications with a subject company, public appearances, and financial interest in the securities
of the subject company.

Part of the analyst compensation comes from the profits of BTG Pactual US or its affiliates as a whole and/or its affiliates and, consequently, revenues arisen from transactions held by BTG Pactual
US or its affiliates.


Statement of Risk

We believe the key risks are additional competition and regulatory issues. In addition, there are potential risks inherent in
investing in emerging market countries. Potential emerging market related risks include, but are not limited to, the volatile nature
of the currency, regulatory and sociopolitical risk, and abrupt potential changes in the cost of capital and economic growth
outlook. Valuations can also be affected by "contagion" from developments in other emerging markets.


Company Disclosures

Company Name Reuters 12-mo rating Price Price date
Avianca Holdings
1, 6, 9, 18, 20, 21, 22
AVH.N Buy US$16.00 7-1-2014
Cementos Argos
1, 2, 4, 6, 9, 18, 20, 22
N.A. Buy COP9,360.00 7-1-2014
COPEC
1, 2, 4, 6, 18, 19, 20, 21, 22
COPEC CI Buy CLP6,984.30 7-1-2014
Credicorp
18, 19, 20, 21, 22
N.A. Buy US$130.80 7-1-2014
Grana y Montero
1, 9, 18, 20, 22
1439641 Buy US$21.43 7-1-2014

1. Within the past 12 months, BTG Pactual US or its affiliates has received compensation for investment banking services from this company/entity.
2. BTG Pactual US or its affiliates expect to receive or intend to seek compensation for investment banking services and/or products and services other than investment services from this
company/entity within the next three months.
4. This company/entity is, or within the past 12 months has been, a client of BTG Pactual US or its affiliates, and investment banking services are being, or have been, provided.
6. BTG Pactual US and/or its affiliates receive compensation for any services rendered or presents any commercial relationships with this company, entity or person, entities or funds which
represents the same interest of this company/entity.
9. BTG Pactual US or its affiliates has acted as manager/co-manager in the underwriting or placement of securities of this company/entity or one of its affiliates or subsidiaries within the past 12
months.
18. As of the end of the month immediately preceding the date of publication of this report, neither BTG Pactual US nor its affiliates or subsidiaries beneficially owned 1% or more of a class of this
company`s common equity securities.
19. Neither BTG Pactual US nor its affiliates or subsidiaries have managed or co-managed a public offering of securities for the company.
20. Neither BTG Pactual US nor its affiliates or subsidiaries engaged in market making activities in the subject companys securities at the time this research was report was published.
21. BTG Pactual US or its affiliates or subsidiaries have not received compensation for investment banking services from the companies in the past 12 months.
22. BTG Pactual US or its affiliates or subsidiaries do not expect to receive or intends to seek compensation for investment banking services from the companies within the next 3 months.



The Andean/Southern Cone
5SIMTM
07 January 2014 page 14

Avianca Holdings

Source: BTG Pactual and Economatica. Prices as of 07 January 2014
Cementos Argos

Source: BTG Pactual and Economatica. Prices as of 07 January 2014
COPEC

Source: BTG Pactual and Economatica. Prices as of 07 January 2014
Buy
Neutral
Sell
No Rating
0.0
10.0
20.0
30.0
7
-
J
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-
1
1
7
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7
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StockPri ce (US$) Pri ce Target (US$)
Buy
Neutral
Sell
No Rating
0.0
2000.0
4000.0
6000.0
8000.0
10000.0
12000.0
7
-
J
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StockPri ce (COP) Pri ce Target (COP)
Buy
Neutral
Sell
No Rating
0.0
1000.0
2000.0
3000.0
4000.0
5000.0
6000.0
7000.0
8000.0
9000.0
10000.0
7
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StockPri ce (CLP) Pri ce Target (CLP)


The Andean/Southern Cone
5SIMTM
07 January 2014 page 15

Credicorp

Source: BTG Pactual and Economatica. Prices as of 07 January 2014
Grana y Montero

Source: BTG Pactual and Economatica. Prices as of 07 January 2014
Buy
Neutral
Sell
No Rating
0.0
40.0
80.0
120.0
160.0
200.0
7
-
J
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-
1
1
7
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StockPri ce (US$) Pri ce Target (US$)
Buy
Neutral
Sell
No Rating
0.0
10.0
20.0
30.0
7
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5SIMTM
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The Andean/Southern Cone
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07 January 2014 page 17

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