AN INSIDERS TIP AMONG THE EMERGING ECONOMIES
INVESTORS DISCOVER MEXICO FOR YOURSELF
(First published by N-TV.de in German)
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A renewed interest in Mexico goes around just for investors.
(Photo: REUTERS)
Egmond Haidt and Benjamin Feingold
The poor performance of the Brazilian market allows investors to search for alternatives. Now, some bargain hunters discover Mexico. The powerful desire for reform and the loose monetary policy to attract investors. The country has more to offer than drug wars, it says.
Kidnappings, clashes between drug cartels and the military – organised drug crime has led Mexico to the brink. Slowly successes in fighting set however, which help the Mexican economy. But that is not enough for President Enrique Peña Nieto. He also pushes reforms that are unusual for the country. Results give him this right.
The difficulties of emerging markets this year are not without a trace passed but also in Mexico. Not only in the Mexican economy, the stock market was unable to escape the trend to weakness. Compared to other countries such as Brazil and India, the country has more ways to get rid of the crisis. So, the Federal Reserve lowered interest rates to stimulate the economy. In Brazil, interest rates had to be increased, however, due to capital flight and a rise in inflation.
The bargain hunters are already active in the Mexican stock market. Put out that the reforms of President Peña Nieto will provide a significant acceleration of economic growth in the next year. The Prime Minister has taken last even the opening of the oil market so far strictly State-controlled in attack.
Great Reform
First reform projects has already met Prime Minister, and taken for example the reform of the labour market and the deregulation of the telecom area in attack. A competition authority is built in the telecom market, which should curb the power of the market leader America Movil. The company has a 70 percent market share in the mobile sector. Currently, Peña Nieto has pushed even the deregulation of the markets. For many Mexicans, that was unimaginable for a long time, is the sector however, since 1938 in State-owned. PEMEX, the State oil company it however, lack sufficient investment opportunities, which is why production decreases. In contrast, the oil production in the United States increases considerably. Thanks to the Know-How of foreign oil companies, Nieto intends to increase Mexico’s oil production until 2018 to 20 percent.
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