Enrique Peña Nieto, Mexico’s president, has pulled a rabbit out of the hat. If all he wanted for Christmas was energy reform, well, Santa looks to have come early.
Just a few days ago, Senators were struggling to get together to thrash out details of the country’s sweeping energy reform and there was talk of having to extend sessions beyond December 15, when legislators break for the holidays. Continue reading »
Heineken, which bills itself as “the world’s most international brewer”, is stepping up its drive into the premium beer market in Mexico. It’s going to be tough, for two reasons.
First, beer is ubiquitous in Mexico – and very, very cheap (a bottle of beer is not far off the price of a bottle of water). So persuading consumers to switch from their cheap lager of choice to a premium brand, at higher cost, sounds like a tough sell. (To put that into perspective – premium brand beers only account less than 5 per cent of Mexico’s $7.5bn beer market, Heineken says.)
The second hurdle is competition: Heineken, which bought Mexico’s No. 2 brewer Femsa Cerveza in 2010 (and has a stable that also includes Tecate, Dos Equis, Sol, Bohemia and Indio), is up against the larger Modelo brewery (maker of Corona and Estrella beer), which was taken over this year by Belgium’s AB InBev and has 58 per cent of the market to Heineken’s 41 per cent.
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The surprising thing about Brazilian banking giant Itaú’s decision to open up investment banking operations in Mexico is, perhaps, that it hasn’t done so already.
Mexico is, after all, the region’s second-largest economy, and it is having an electric year on financial markets as well as being in the throes of some serious structural reforms designed to pull in billions of dollars in investment, especially in the energy sector.
Itaú BBA, the bank’s corporate investment banking arm, expects to open up shop in January under the stewardship of Alberto Mulas, an investment banking specialist with experience in the corporate world and in government. Continue reading »
Education was one of the reforms pushed through by Enrique Peña Nieto, Mexico’s president, this year. Good job too, if the latest OECD statistics are anything to go by.
The OECD’s Programme for International Student Assessment, or PISA, scores – which measure performance in literacy, maths and science every three years – make for depressing reading. Particularly if you compare performance with China – Mexico’s great manufacturing competitor. Continue reading »
The hotly contested Honduran election still hasn’t yielded a final official result. But maybe it’s not too soon to spot some lessons Mexico might offer the Central American state.
They boil down to: “Amlo” vs “Pacto”. Continue reading »
How ironic. Just after Mexico’s annual three-day bargain weekend known as the “buen fin” racked up sales of 160bn pesos ($12m) , retail sales data for September was published – and they were terrible.
The 4 per cent drop in retail sales in September (and a 0.4 per cent month-on-month fall) comes just as the economy was showing tentative green shoots after a year in which growth is now expected to struggle to top 1 per cent – less than a third of the government’s heady early predictions.
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He’s Mexican and rich. He owns important stakes in telecoms and media operations. But his name is not Carlos Slim.
David Martínez is a studiously low-profile financier who is now spending $960m to add control of Telecom Argentina to his stable of investments, which includes a 40 per cent stake in Cablevision, the cable TV unit owned by Argentine media empire Clarín. Why? Let’s face it, many other business folk tend to give Argentina a wide berth. Continue reading »
Capital Economics reckons the worst of Mexico’s annus horribilis is behind it. Share the optimism?
Let’s see: in terms of economic data this week, industrial production fell by 1.6 per cent (way higher than the 0.4 per cent market consensus) in September. That was dragged down by construction, which crashed 8.3 per cent, its 13th successive monthly fall, but manufacturing was anaemic too. Continue reading »
Mexico is slowing – so says the central bank on Wednesday, cutting growth forecast to 0.9 – 1.4 per cent, down from its previous estimate of 2-3 per cent – Banxico’s second consecutive quarterly cut (you can read the story here on Fast FT).
But Mexican car production and exports are revving up, hitting record levels in October. Not bad for an economy where manufacturing confidence is still in the doldrums. Continue reading »
“I’m not risk averse. Because of that, I do what I do in this part of the world.” So said Woods Staton, CEO of Arcos Dorados, the world’s largest McDonald’s franchisee and the largest operator of McDonald’s restaurants in Latin America and the Caribbean, in a recent interview with beyondbrics in Mexico City.
The region is fraught with risk: fading growth in Brazil and Mexico; lower consumption patterns in some parts of the region; forex volatility and the need to report earnings in dollars while revenues are not in dollars; electoral uncertainty in some countries; and tough competition in the fast-food segment in general. Despite all that, Arcos Dorados performed well in the third quarter, as shown by financial results reported on Tuesday. Continue reading »
So… Mexico’s economy is looking up, isn’t it? Despite another sluggish print in the third quarter, when the economy expanded just 1 per cent, the government praised the increasing dynamism of the manufacturing and export sectors.
Hmmm. That official confidence has yet to prove catching, it seems. Not only was manufacturing confidence perilously close to the threshold between optimism and pessimism in October, but consumer confidence and producers’ confidence also tumbled.
Consumer confidence, which was down for the second month running, fell by 0.5 points in seasonally adjusted terms and was lower in four out of the five components measured.
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Mexico is going to have to pull its socks up if it wants to reach the government’s official growth forecast this year.
Let’s recap: the economy saw first quarter growth of 0.8 per cent; a second quarter contraction of 0.7 per cent, and now third quarter growth of 1 per cent. Continue reading »
Mexico’s consumer confidence has been on the rise and there are tentative signs of economic recovery.
But the optimism has yet to percolate through the economy. Banks’ bad debts are at their highest level in a decade and up a staggering 41 per cent in a year. Continue reading »
For the second month running and the third time this year, the Bank of Mexico has cut its key interest rate, bringing it to a new historic low of 3.5 per cent in a widely-expected move aimed at giving a boost to economic growth.
The 25 point cut followed a surprise cut of the same size on September 6 after the economy shrank in the second quarter for the first time in four years. The bank also cut by 50 basis points in March. Continue reading »