Mexican home builder Corporación Geo SAB said Thursday it has filed for bankruptcy protection in Mexico with a prearranged restructuring plan it hopes will get the struggling company building again. In a statement, Geo said several bank creditors and bondholders signed off on the plan.
Mexico’s Finance Minister Luis Videgaray said there is no need to support the peso, which has fallen to its weakest in 18 months, because the market remains sufficiently liquid.
“The Mexican peso market is, fortunately, highly liquid and at the moment doesn’t require any support,” Videgaray said in an interview at the World Economic Forum in Davos, Switzerland. “We have a very liquid market and we don’t see the need to inject liquidity, to intervene.”
In Latin America, this looks to be the year of Brazil — thanks to the impending World Cup and presidential elections. But with another lackluster year looming in emerging markets, fans of transformation, growth and investment potential should instead look to Mexico.
Brazil’s president, Dilma Rousseff, is expected to win a second term this year, and its soccer team stands a good shot at victory. But growth has slowed considerably. In the world’s seventh largest economy, reforms are stagnating and the country faces a possible ratings downgrade.
Mexico, by contrast, is in the throes of serious reforms. It will likely lead Latin America with at least 4 percent growth this year and an improving investment outlook. Standard & Poor’s recently boosted Mexico’s credit ratings because of energy reforms that the rating company trumpeted last month as a “watershed moment” for the country. It is becoming a story of inverted fortunes, as Michael Shifter and Cameron Combs of the Inter-American Dialogue recently wrote.
Comments to the United States Department of Commerce regarding the U.S.‐Mexico High Level Economic Dialogue (HLED)January 10, 2014
Mexico Institute Director Duncan Wood and Associate Christopher Wilson responded to the U.S. Department of Commerce Federal Register Notice published on November 25, 2013, which requested stakeholder input on the U.S.‐Mexico High Level Economic Dialogue (HLED)
In their comments, they noted that Mexico and the United States share an economic space and an economic future, and that the HLED is an important and potentially fruitful element in moving that future forward and maximizing the benefits for both countries. They stated that it should be both consolidated through high‐level engagement and institutionalization, and broadened to include a greater dialogue with the private sector and civil society and an expanded focus on border affairs.
Read their testimony here.
Mexican inflation picked up less than expected in November on a spike in fresh food and electricity costs and muted underlying price pressures boded for steady borrowing costs through next year.
Inflation in the 12 months through November rose to 3.62 percent, the national statistics agency said on Monday.
Three years into her home-ownership dream, Martha Orozco has had enough. Stuck in a government-sponsored complex called Parque San Mateo that’s two hours away from her $8,000-a-year job as a hospital secretary in Mexico City, Orozco sees only broken promises and blight all around her.
The program has been a disaster. Hundreds of thousands of homes are now derelict after buyers such as Orozco concluded they were located too far from city centers and moved out. Developers, their profits assured by government guarantees, built houses faster than municipalities could connect them to water systems and power grids.
Global oil majors from Exxon Mobil Corp. to Chevron Corp. are about to get the clearest indication yet of how far Mexican lawmakers will go to lure them into the largest unexplored crude area after the Artic Circle.
Senate committees will begin debating a bill to end a seven-decade state oil monopoly as soon as today. On the agenda is a proposal by members of President Enrique Pena Nieto’s Institutional Revolutionary Party, or PRI, and the National Action Party, or PAN, to extend a profit-sharing model unveiled in August by also allowing production sharing or a license model used in Brazil, said two people with knowledge of the talks.
Mexico’s recent tax overhaul does not do enough to curb the government’s dependence on oil revenue while other major reforms may not boost economic growth as much as authorities forecast, the International Monetary Fund said on Tuesday.
“With the prospect of declining oil production over the next decade, the federal government needs to beef up its collection on non-oil revenues,” the IMF said in a report on the fiscal reform that accompanied its so-called Article IV consultation with Mexican authorities.
The Christian Science Monitor, 11/26/2013
Mexico may be all the rage among investors. But praise the country in polite Mexican society and you risk running a gauntlet of abuse. John Authers, the FT’s investment columnist and a former Mexico bureau chief, describes the situation very well.
Certainly, President Pena Nieto’s reform agenda gets high marks for concept but low marks for delivery. Of his four biggest initiatives, the detail of telecom reform is still being worked out; ditto education; the fiscal reform was disappointing; and we don’t yet know the full shape of the energy reform. No wonder the understandable skepticism, then, of much local conversation – even if the intensity of that conversation has meant missing another problem that has not won the discussion it deserves.