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A year ago, the reforms of Mexico’s restructuring law for financially distressed companies were just taking effect. Most practitioners felt the changes addressed many of the flaws in the existing bankruptcy or concurso process. One year later, the new restructuring law is again in the spotlight, as the three largest bankruptcies currently before the courts are proving terrible test cases for the revised law and highlighting where further improvements are needed. Read more
Bye-bye “primitive” internet banking. Hello smart banking straight from your smartphone. That, at least, is the pitch from Mexico’s Grupo Azteca, part of businessman Ricardo Salinas’s finance, retail and TV empire. Read more
The CFE, the state electricity company, has inaugurated four “electrostations” – recharging stations for electric or hybrid cars – in a partnership with retailer Walmart, carmaker BMW and Schneider Electric, an electricity distribution and management company which has developed (in Mexico) the all-car compatible “plug”. Read more
The latest log on the fire comes from Darío Celis, a columnist at newspaper Excelsior. Nothing has been confirmed by anyone yet, but it’s tempting to linger over his article for a moment.
He reckons five groups are interested in Banamex, Mexico’s second biggest bank – including two prominent – and now out-work, or soon to be so – senior Mexican bankers. Read more
A new year, a newly opening Mexican oil sector … but things are off to a mixed start.
On the less than rosy side, little more than a week into what is supposed to be a year heralding an unprecedented energy investment boom, Pemex, the state oil company, has taken the step of not renewing a host of contracts for oil service workers. Read more
Mexico’s government recently passed reforms repealing important limitations on oil and gas ownership introduced in 1938.While these reforms will reshape Mexico’s energy industry over the next few years, they will also bring about investment opportunities in the energy industry throughout the rest of Latin America.
The proposed privatization of Pemex, the state oil company, would open up 17 per cent of currently producing oil fields to foreign exploitation and allow foreign companies to bid for development rights to 79 per cent of Mexico’s reserve fields. In addition, the state-owned Federal Electricity Commission (CFE) is set to face competitors. Mexico’s energy industry, which was in decline due to the dire need for improved technology, investment and reserve management, is now gushing with investment opportunity that will be principally supported by investors from the US and Canada. However, there will also likely be great interest from investors worldwide. Read more
By Grace Fan, Trusted Sources
One-third of the way through his six-year term, Mexican President Enrique Peña Nieto has dazzled investors with his ambitious reform record, the cornerstone of his administration’s broader development programme to revitalize the sluggish Mexican economy. But the telegenic 48-year-old leader with a reputation for results-oriented governing has failed to convince his increasingly sceptical domestic constituency that he can deliver the goods.
Tepid GDP growth, devastating security problems, political mis-steps and escalating corruption allegations at the end of the year have embroiled him in the worst political crisis in the two-year history of his administration. Read more
By Alejandro Poiré of Tecnológico de Monterrey
What makes Mexico’s current political turmoil unique is that it has put the problem of corruption front and centre of the social agenda. Streets, schools, homes, corporate offices, union meetings and workplaces are teeming with a mix of anger and concern. There is an underlying feeling that it is corruption that lies at the root of our inability to protect the innocent from murder and abuse; that it is corruption that could derail the future promised by the remarkable reforms of the past few years.
As Mexico’s leading public intellectuals have argued, its current crisis, a crisis of corruption and rule of law, calls into question its very viability as a democracy. Yet its political elites have yet to grasp the depth of the problem. The government’s leadership style has pushed social allies away. Opposition parties, mired in their own decomposition, have not served as a channel for social outrage, and players on all sides of the aisle seem way too eager to look past their lamentable wrongdoings. Read more
You don’t have to look far to see the impact on Mexico of falling oil prices (now close to a five-year low): just take a look at the trade balance of state giant Pemex . It slumped by half in one month, to $656m in October from $1.3bn in September, and that was before the combination of Mexico’s lower production and lower world prices really began to bite.
So now would be a good time to take a cold look at how much damage falling prices could really do to Mexico as it prepares to open up its oil sector to private investment, what Mexico could do about it, what wider impact that could have, and what the US and the International Monetary Fund could do to help. Read more
How far to trust a politician? Often a tricky subject – especially in a country like Mexico, where impunity is rife and many elected representatives appear still to live by the maxim of the late Carlos Hank González, an influential politician and businessman (with a statue to his honour in the city of Toluca), namely: “A politician who is poor is a poor politician.” Read more
It was hard to miss the massive demonstrations in Mexico City on Thursday night: tens of thousands of people marched to the main square, the Zócalo, many waving flags with Mexico’s green and white stripes turned black. They were demanding justice in the wake of the apparent murder of 43 students in September that has convulsed the nation. Many chanted from one to 43, then shouted the word “justice”.
Enrique Peña Nieto, the president, clearly heard the call: at a justice forum on Friday, he said: “One of the principal demands of Mexican society is to count on better results in the procurement and implementation of justice.
Mexico’s government has bowed to the inevitable and cut its 2014 GDP growth forecast, to between 2.1 and 2.6 per cent this year, despite hailing a pick-up in activity in the third quarter that it said should continue throughout the rest of the year.
No big surprise there – growth has been disappointing all year so the writing has long been on the wall. And indeed owing to a change in methodology (more on this shortly), the government is keeping its options open with a new range-based forecast. For 2015, its estimate is 3.2 to 4.2 per cent. The growth goal for 2015 in the budget was 3.7 per cent.
But is there a silver lining to all these cuts? Read more
All change: After a leadership conflict that sent shares tanking, Mexican bank Banorte, the country’s fourth biggest by loans, has a new chairman and CEO.
Replacing Guillermo Ortiz, a former finance minister and central bank governor, as chairman is Carlos Hank González, grandson of the former controlling shareholder “Don Roberto”. Mr Hank’s ascent was in the works for months and triggered the change of command, while also boosting the family dynasty’s influence over the lender in which it is the largest shareholder. Read more
However, in a statement to the stock exchange, company officials said its market-oriented reorganisation would bring greater efficiency and transparency as it moves into a new era of competition.
The long-planned restructuring scraps Pemex’s four divisions – exploration and production; refining; petrochemicals; and gas and basic petrochemicals – and replaces them with just two: upstream and downstream, or exploration and production on one hand and industrial transformation on the other. Its five non-core subsidiaries – drilling, logistics, co-generation and services, fertilisers and ethylene – are destined to become affiliate companies in the coming year. Read more
Brazil and Mexico, Latin America’s two biggest economies, are engulfed in high-profile scandals that have involved their presidents and also touched on investor interests. So far, Dilma Rousseff has made a better fist of handling the fallout in Brazil than Enrique Peña Nieto has in Mexico – although that could easily change. Read more
Never mind that Mexico last week stripped a Chinese-led consortium of a $3.6bn bullet train tender, prompting the China Railway Construction Corporation to announce that it was “extremely shocked” and could sue, according to official news agency Xinhua.
No, business confidence between the two nations – a key Mexican foreign policy goal – is growing, President Enrique Peña Nieto told a forum in Shanghai.
For proof look no further than Pemex, Mexico’s state oil company, which signed a “first” $10bn credit line with ICBC bank (more on them in a moment) for it and its service companies’ upstream projects and the acquisition of offshore equipment. Read more
For Mexico, which does not produce all the natural gas it needs, the benefits of importing from the US are clear – it’s cheaper, it’s cleaner and it’s going to bring lower tariffs for manufacturers more quickly than continuing to rely on costly fuel oil.
But what about the other side of the bargain? What’s in it for the US? Read more
Mexico has had several years of bad news on the security front. After decades of peace, the tide changed dramatically in about 2007. History will determine whether conditions at the time justified a decision of such magnitude; the reality is that the launching of an all-out war against drug cartels in that year sparked an upsurge in violence, murder and insecurity not seen since the post-Revolution years of the 1920s. Read more
The veteran head of Mexico’s stock exchange, Luis Téllez, has announced his resignation from the start of next year.
The official reason, given in a statement, is that the former minister and member of Mexico’s new sovereign fund plans to “dedicate himself to new projects”.
It is not yet clear who will step into the role as bourse chief, a position Mr Téllez has held since 2009. Under his stewardship, the stock market has developed a flourishing market in so-called Fibras, akin to real estate investment trusts, or REITS, and has just joined the MILA bourse tie-up with Chile, Peru and Colombia. Read more