Plummeting Peso Hurting Border Economy

9/2/15 The Texas Tribune

border2Clothing store owner Les Norton remembers when throngs of Mexican shoppers would make their way up Laredo’s Convent Avenue and stay in Texas for hours before returning to Nuevo Laredo, Mexico.

But Norton, president of the Laredo Merchants’ Association, has seen business at his La Fama clothing store drop off in recent months due, in part, to the depreciation of the Mexican peso.

On Tuesday, about 17 Mexican pesos equalled one U.S. dollar, up from about 13 in September 2014. For people like Norton, who estimates that 70 to 80 percent of his clientele is from Mexico, that means the fall and winter shopping seasons will be unpredictable at best.

“Unfortunately downtown Laredo is experiencing a decline that nobody’s happy with,” Norton said.

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Pessimism Pervades Mexico as Economic Promises Fall Short

9/1/15 The New York Times

Data from INEGI
Data from INEGI

Jesús Rascón embodies the sort of success story that was supposed to epitomize “Mexico’s moment.”

The plastics company he founded 13 years ago now employs 350 people in two factories. He sells parts to global companies like Volkswagen and Whirlpool. Even the slide in the value of the Mexican peso this year works in his favor because it makes his products cheaper overseas.

Then why is he feeling so glum about Mexico’s economy?

In a word: poverty. “Unfortunately the problem in Mexico is the wage rate, which is enough only to survive,” said Mr. Rascón, 48. Unless people have money to spend, he added, the companies that sell to them will never be able to expand the way his has. Such economic pessimism is pervasive across much of the country as President Enrique Peña Nieto prepares to reboot his presidency midway through his six-year term.

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Texas Gov. Abbott to Visit Mexico to Mend Fences, Talk Trade Amid Strained Ties

8/25/2015 The Dallas Morning News

Greg_Abbott_by_Gage_SkidmoreGov. Greg Abbott is expected to visit Mexico City on Labor Day weekend, his first trip abroad as governor, and will lead a delegation of Texans eager to move forward amid turbulent times between once-solid neighbors, The Dallas Morning News has learned.

The agenda is still being fleshed out for the first trip to Mexico by a Texas governor since 2007, but people familiar with the matter say the visit is aimed at mending fences and underscoring the economic, cultural and political integration between Texas and its southern neighbor, an important trading partner.

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Mexico’s Trade Deficit Widens in July to $2.27 Billion

8/27/2015 Wall Street Journal

MEXICpeso by Guanatos GwynO CITY—Mexico’s trade deficit widened in July as a drop in crude-oil prices continued to weigh on petroleum exports while manufacturing exports grew at a modest pace from a year before.

The country registered a trade deficit of $2.27 billion last month, bringing the accumulated shortfall in the first seven months of the year to $6.32 billion, the National Statistics Institute said Thursday. The deficit was wider than the median estimate of $1.44 billion in a Wall Street Journal poll of six economists. It was also wider than the $1 billion deficit registered in July 2014.

Overall exports fell 2.6% to $32.8 billion, while imports edged up 1.1% from a year before to $35.07 billion.

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Mexican watchdog probes Carlos Slim’s fixed-line Telmex group

8/26/2015 Financial Times 

Telmex

Mexico’s telecoms regulator is investigating whether Telmex, Mexican mogul Carlos Slim’s fixed-line telecoms group, breached the terms of its concession by being involved with a satellite television service.

The investigation potentially spells more bad news for Mr Slim’s América Móvil (AMX), whose stock has fallen by a fifth so far this year.

AMX, Telmex’s parent, said in a statement to the stock exchange that the Federal Telecommunications Institute had notified it that it was examining both whether it had breached its concession as well as the constitution and telecoms law. That relates to a rule requiring retransmission of television signals by other concession holders — widely known as the “must offer” principle.

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Pemex faces downgrade risk amid price pain

8/26/15 Financial Times

Pemex LogoAdding insult to the injury of renewed falls in oil prices, Mexico faces the prospect of a ratings downgrade at its national oil company, Pemex.

Moody’s said it had put Pemex’s A3 ratings, the same as Mexico’s sovereign rating, under revision for a possible downgrade because of weak cash generation and a deterioration in the company’s financial profile this year, reports Jude Webber in Mexico City. And, it added: “Moody’s opinion is that it will continue its deterioration in the coming years … and will have large debt needs in the near future”.

Ouch. The downgrade prospect touched a raw nerve at the company, which is already navigating a brave new world at home after been stripped of its nearly 80-year monopoly as Mexico liberalises its energy sector. Its financial debt increased in the second quarter by 16.4 per cent to $85.5bn and 75.5 per cent of its debt is denominated in dollars.

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Billionaire Tycoon Carlos Slim Actively Bidding In Mexico’s Historic Oil Auction

8/25/15 Forbes

carlos-slimWhen Mexico opened its oil and gas sectors to domestic and foreign private capital for the first time in nearly eight decades last year, it was widely expected that Mexican tycoon Carlos Slim Helú would play a leading role in the country’s new energy landscape. However, it was not until recently that this was confirmed: Slim’s companies have been quietly bidding in Mexico’s historic Round One oil auction.

According to Mexico’s National Hydrocarbons Commission (CNH), Carso Oil & Gas, an affiliate ofGrupo Carso , the conglomerate controlled by billionaire Slim, is participating in the second and third tenders of Round One for oil production contracts.

Carso Oil & Gas has enrolled in the second bidding of Round One for five shallow-water production-sharing contracts in nine Gulf of Mexico blocks. Bids are expected on September 30, 2015.

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