When it comes to investing in emerging markets, traders tend to have tunnel vision, focusing only on the BRIC nations to the exclusion of all others. But in so doing, they overlook some economies that may offer interesting opportunities.

Like Argentina, for example. Last year, stocks saw strong gains on high grain prices and a booming export business -- and it's only expected to continue in 2011. This year, the country's Central Bank is projecting its economy to swell somewhere between 3.5% and 6.5%. Argentina's presidential administration inspired investors' confidence in its nation's ability to pay its debts, spurring a bond rally in the latter half of the year.

Plus, interest rates are currently near zero in the developed world -- and that alone is enough to make foreign investors salivate over Argentinian high-yielding bonds.

Where Brazil is currently facing a nationwide currency crisis, Argentina's central bank wisely adopted a policy of gradual currency depreciation, slowly weakening the peso to favor exporters. Given heavy dollar inflows last year, the peso may have strengthened to 1.86 pesos without government intervention, according to President Cristina Fernandez. But instead, the peso declined 4.5% against the U.S. dollar.

Argentina's stock market closed out 2010 at a record high, with banks the biggest winners of the year. And Leonardo Bazzi, head of research at Argentinian brokerage Puente, thinks there's room for further upside in 2011, with lending business growing and bond holdings on the rise.

Oil and gas also saw big returns last year, following some multi-billion dollar Chinese oil company acquisitions and the discovery of large deposits of unconventional gas.

Think Argentina will continue its rallying streak? Here's a list of the country's top-performing stocks over the last year. (Click here to access free, interactive tools to analyze these ideas.)

Company

Industry

Performance Over Last Year

Grupo Financiero Galicia (Nasdaq: GGAL)

Regional Bank

190.86%

Nortel Inversora (NYSE: NTL)

Telecom Services

114.18%

Transportadora de Gas Del Sur (NYSE: TGS)

Gas Utilities

94.41%

Alto Palermo (Nasdaq: APSA)

Property Management

85.43%

BBVA Banco Frances (NYSE: BFR)

Regional Bank

83.14%

Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned above. Note: The numbers on top of items represent the forward P/E ratio, if available.


Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

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