December 13, 2013
Financial Times, 12/12/13
After being banished to an auditorium when leftist deputies hijacked the chamber, Mexico’s lower house of Congress passed historic energy reforms on Thursday designed to lure billions of dollars in investment to a sector shackled to the state for 75 years.
Cheers of “Mexico, Mexico” were met by chants of “traitors, traitors” from critics of the reform at the culmination of a rowdy session, which was switched to a crowded auditorium after opponents padlocked the chamber and blocked it with chairs in a bid to derail voting.
December 11, 2013
President Enrique Pena Nieto may expand the congested Mexico City airport, the busiest in Latin America, on government-owned land east of the capital, his top transportation official said.
Construction could begin as soon as 2014, Communications and Transportation Minister Gerardo Ruiz Esparza told reporters yesterday in Mexico City. Investment in Benito Juarez International Airport would amount to about $5 billion, according to an estimate by Luis Zarate, head of a trade group for builders.
December 6, 2013
Financial Post, 12/4/2013
Both Brazil and Mexico’s traditional and renewable energy sectors are expected to grow, if they can continue to make positive policy reforms and attract the necessary investment. In 2012, Latin America and the Caribbean claimed only 6% of the world’s investment in renewable energy – the majority of which went to Brazil and increasingly Chile – but analysts at the Inter-American Development Bank claim that the region is the “new frontier“ for clean energy investment.
If the region is to live up to these high expectations, its energy-rich countries must raise capital to the tune of $430 billion to fully develop its clean energy resources. They must continue to pass reforms that will make private investment more lucrative, and thus more attractive, to hesitant energy companies – who have the capital and the expertise the region needed to develop their shale and deep-sea reserves, as well as their green energy.
November 22, 2013
The Mexico Institute’s “Weekly News Summary,” released every Friday afternoon summarizes the week’s most prominent Mexico headlines published in the English-language press, as well as the most engaging opinion pieces by Mexican columnists.
What the English language press had to say…
This week’s press had interesting reports on the Mexican economy. The New York Times published an article describing how dozens of foreign companies are investing and filling in new industrial parks along central Mexico. As a result, middle-class housing is popping up and new universities are waving in classes of students eager to study engineering, aeronautics and biotechnology, signaling a growing confidence in Mexico’s economic future and what many see as the imported meritocracy of international business. On a similar note, the Wall Street Journal noted that even though Latin America has been a laggard among developing markets this year, some advisers are convinced the resource-rich region is poised for a turnaround. But instead of investing once again in Brazil, portfolio managers are finding smaller markets in Mexico and Chile as better bets to tap into Latin America’s long-term growth. Finally, the Economist claimed that to implement and to boost sustaining growth, a bold energy reform is needed. Without it, Mexico’s moment may prove to become fleeting one.
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November 21, 2013
The Wall Street Journal, 11/21/2013
Even though Latin America has been a laggard among developing markets this year, some advisers are convinced the resource-rich region is poised for a turnaround.
But instead of investing once again in Brazil–the 800-pound gorilla in the group–contrarian portfolio managers are finding smaller markets in Mexico and Chile as better bets to tap into Latin America’s long-term growth.
November 7, 2013
The Financial Times, 11/06/2013
The Mexican government is negotiating a more ambitious energy reform than previously expected with the main opposition party, opening up the prospect of market-friendly contracts that could attract billions of dollars into the sector, according to two senior officials familiar with the talks.
Under the discussions between the ruling Institutional Revolutionary Party (PRI) and the National Action Party (PAN), the state would be able to decide the terms of the contracts to be offered for each project, rather than the government’s initial plans for profit-sharing agreements, which had disappointed investors as too tame.
October 28, 2013
Financial Times, 10/27/2013
Mexico is poised to levy some of the world’s harshest royalties on mining companies potentially hurting its business-friendly image just as, paradoxically, it seeks to open its energy sector up to private investment.
The proposal before the Senate, which has a deadline for approval of October 31, would impose a 7.5 per cent flat tax on mining profits, levy an extra 0.5 per cent on profits from precious metals and stop exploration expenses from being immediately tax deductible.
October 28, 2013
Mexico is fast becoming a major player in the “nearshoring” sector for tech and business process exporting. During a recent trip to the city of Guadalajara I visited the Centro del Software, an incubation hub for start-up tech companies. In an article for Americas Quarterly called “Mexico’s Silicon Valley” I explained “Mexico is quietly emerging as a capital of Latin America’s growing information technology (IT) outsourcing industry.”
September 24, 2013
Despite its lackluster performer this year, Mexico is still a favorite investment for Latin America-bound emerging market fund managers. And on Monday, investors were given another reason to like this country.
Retail sales rose 1.3% year over year in July. The headline retail sales index posted a stronger expansion than consensus, which was 0.5%. In seasonally adjusted terms, Mexican retail sales rose 0.6% month over month, also above than consensus.