Mexico: investors curb their enthusiasm
Mexico was one of investors’ favourite emerging markets last year.
Foreign investors poured a record $73.2bn into Mexican bonds and stocks in 2012 – a 60 per cent jump from the year before. Given the momentum behind the country, few at the start of this year would have dared to predict that the inflows would slow.
They were wrong. Continue reading »
Mexico’s Q1 GDP: don’t panic yet
It shouldn’t have come as a shock. Several indicators had warned about it.
Still, for Mexico’s fans, the country’s disappointing first quarter GDP figures must have been a hard pill to swallow. The economy expanded just 0.8 per cent in the first three months of this year, well below the 3.2 per cent growth it saw in the previous quarter and below the 1.2 per cent increase the market was expecting.
It was, in a nutshell, the weakest performance since Q4 of 2009. Continue reading »
Carlos Slim stubs out cigarette habit
Carlos Slim is always on the move: reviewing, restructuring and reinventing his companies.
His latest action in this direction came on Tuesday with his industrial conglomerate, Grupo Carso, exiting its investment in Philip Morris México (PMM). Carso agreed to sell its remaining 20 per cent stake for $700m to Philip Morris International (PMI), which becomes sole owner of PMM.
Mexico economy: storm clouds gathering?
Mexico on Friday posted its worst monthly industrial production figures since the 2009 recession brought on by the US financial crisis.
The figure shrank 0.3 per cent in seasonally adjusted terms compared with February, and by a spine-chilling 4.9 per cent compared with the same month of 2012. Analysts had expected the March number to fall a far more modest 1.4 per cent. Continue reading »
Fitch upgrade: Mexico making all the right noises
On Wednesday, Mexican President Enrique Peña Nieto received a welcome piece of news: Fitch, the rating agency, said it would upgrade Mexico’s foreign-currency debt one notch to BBB+.
The timing of Fitch’s announcement, which came on the same day that Peña Nieto unveiled a financial reform bill, is nothing if not interesting. Inspired by the administration’s dynamic reform agenda since taking office in December, it nevertheless comes well before Peña Nieto takes on the most important reforms of all: energy and taxation. Continue reading »
[snap]: Fitch ups Mexico rating to BBB+
The love for Mexico just keeps on coming.
Fitch Ratings on Wednesday lifted Mexico’s foreign currency debt rating – the one that really matters – from BBB to BBB+.
The change, which puts Fitch’s rating on par with Moody’s, comes as centrist President Enrique Peña Nieto forges ahead with the most ambitious reform proposals in decades. Continue reading »
Honda ramps up Mexico investment
The central Mexican region known as El Bajío is known as the nation’s colonial heartland, its grain belt and a hotbed of fervent Catholicism. Now Japanese auto production can be added to the list.
While Barack Obama and the Mexican president, Enrique Peña Nieto were talking in Mexico City about jobs, Honda was announcing the creation of 1,500 of them in an $470m transmission plant to be built in Celaya in El Bajío. Continue reading »
Mexico rates: holding, for now
Mexico’s central bank on Friday held its benchmark rate at 4 per cent – brushing off concerns that the economy could be losing steam.
Growth in industrial output has slowed and retail sales dropped in February by the most in more than three years. On the other hand, capital has flooded in, the peso has surged by 6 per cent this year and inflation hit 4.7 per cent early this month, though Agustín Carstens, the central bank governor, believes it will drop to not much more than 3 per cent by the end of the year. Continue reading »
Peña Nieto suffers first setback
Mexico’s reformist administration suffered its first significant setback on Tuesday as political infighting forced it to back-peddle on plans to unveil a banking-reform bill. But how serious is the scrap? And how will it impact the rest of the government’s reform programme?
Investors need to have a sense of both answers because they have been pouring billions of dollars into the country in the hope that centrist President Enrique Peña Nieto can transform Mexico into one of the world’s most successful emerging markets. Continue reading »
Mexico: time to boost domestic demand
If there were ever any proof of the need for structural economic reform in Mexico, you could do worse than to look at February’s retail sales, which came in far below expectations.
On Monday, the government’s statistics agency reported that sales were down 0.1 per cent in February compared with the previous month in seasonally adjusted terms, and a chilling 2.6 per cent down on figures for the same month last year. HSBC had predicted a 1 per cent increase, and Banamex, Citi’s Mexico arm, had expected a 0.5 per cent increase). Continue reading »
Mexico IP: canary in a coal mine?
Mexico’s industrial production figures, published Thursday, don’t make for particularly fun reading. Output in February fell 1.2 per cent compared with the same month last year. That is the biggest fall in more than three years. Could it be that Mexico’s impressive economic recovery since 2009 is coming to an end? Continue reading »
Mexico’s poverty conundrum
Viene-vienes at work
By Ron Buchanan and Pan Kwan Yuk
They call them the “viene-vienes”. In cities throughout Mexico, red rags in their hands, they wave down motorists into available parking spaces and receive modest tips for their trouble in “looking after the cars”.
Their name comes from their shouts of invitation to their clients: “Viene! Viene!” – “Come on! Come on!”.
The “viene-viene” men occupy one segment of Mexico’s vast informal economy. And their ubiquity is a glaring reminder that – for all the praises that are being lavished on the country’s economic resurgence – poverty remains an obstacle to Mexico’s ability to unlock its full economic potential. Continue reading »
Mexico: where to put the dinero?
You have to read to the end of a JPMorgan report published this week to find out what the bank thinks are the most promising investment opportunities in Mexico over the coming months and years. But when you get there, it makes a lot of sense.
The bottom line (literally, in this case) of the report is that investors should look to invest in new stock-market listings and non-dominant companies operating in areas that the new government wants to make more competitive. Continue reading »
Mexico: next stop, a rating upgrade?
Standard & Poor’s, the rating agency, on Tuesday shifted its outlook on Mexico’s sovereign credit rating to “positive” from “stable” and signalled a possible upgrade during the next 18 months.
The change, which confirmed the country’s BBB foreign currency and A- local currency ratings, comes as centrist President Enrique Peña Nieto forges ahead with the most ambitious reform proposals in decades. Continue reading »
Mexican homebuilders: back in the dumps again
Easy come, easy go.
Barely a week after shares in Mexico’s leading homebuilders shot up on the back of a quasi-bailout – the stocks are back in the dumps again this week. Continue reading »
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