Nov. 23 (Bloomberg) -- Latin America’s stock markets will rebound to almost record highs by the end of next year, with better earnings likely to boost a regional index 27 percent in 13 months, according to JPMorgan Chase & Co.

“Getting back to all-time highs is not difficult,” JPMorgan wrote in a report dated Nov. 20 and e-mailed today. “It would require an earnings surprise that we see as very possible.”

The MSCI EM Latin America Index is likely to reach 5,100 by the end of next year, a 27 percent jump from the Nov. 20 close and within 2 percent of the gauge’s record 5,195.39 closing level on May 19, 2008, JPMorgan strategists and analysts Ben Laidler, Emy Shayo Cherman, Brian Chase and Vinay Joseph wrote.

Brazil’s Bovespa Index will probably climb to 85,000 by the end of next year, compared with a record 73,516 on May 20, 2008. The gauge last closed at 66,327.28.

JPMorgan’s projection for the Mexico Bolsa Index is 38,500, surpassing the 32,836.12 close on Oct. 18, 2007, and 25 percent higher that the 30,666.51 close Nov. 20.

The main threat to these projections are global, including possible bond-market volatility as governments reduce economic stimulus measures, the strategists wrote. Indigenous hazards include elections in Chile, Colombia and Brazil in 2010, exchange-rate fluctuations and the likelihood of interest-rate increases next year, the note said.

To contact the reporter responsible for this story: Camila Fontana in Sao Paulo at cfontana@bloomberg.net

Last Updated: November 23, 2009 07:45 EST