Private equity interest in Mexico remains solid despite Trump

3/22/2017 Financial Times

shutterstock_182486318Private equity and venture capital funds are “certainly not wholesale pulling out of Mexico” despite the uncertainty sparked by Donald Trump’s election, according to the region’s industry association.

Mexico saw a 46.5 per cent increase in the number of private equity and venture deals, to a total of 129 from 88 in 2015, writes Jude Webber in Mexico City. While the deals added up to only $1.8bn in 2016, down from $2.3bn recorded the previous year, it still placed Mexico second by capital deployed behind Brazil, and accounted for 22 per cent of investment in the region, according to the Latin American Private Equity and Venture Capital Association.

“Brazil is typically the largest market for investment activity,” said Cate Ambrose, Lavca president. “It’s interesting that Mexico is top [by number of deals in 2016], particularly in the current context and given that [private equity and venture capital] is relatively underdeveloped given the size of the economy.”

Read more…

Mexican stocks hit new record high, shrugging off Trump trade worries

3/21/2017 Finacial Times

stock-marketMexican stocks demonstrated their resilience to Donald Trump’s anti-trade rhetoric on Tuesday, hitting a new all-time high as the peso’s rally in recent weeks also bolstered investors’ appetite for the country’s other asset classes.

The country’s benchmark IPC index rose as much as 1.3 per cent to 49,240.09 in morning trade, capping a stunning rally that has seen the bourse completely erase its post-US election losses and rise above the previous intraday record of 48,956.06 set last August.

The fiesta in Mexican equities is being fueled by a number of factors. The collapse of the peso – which, despite its recent rally, is still down more than 4 per cent from its pre-election levels – is providing a boost to exporters and magnifying the income of companies that report in pesos but earn the bulk of their revenue overseas.

Read more…

Survey shows Mexico is most attractive emerging market, India the worst

3/22/2017 Business Day

Share market prices shown on anMexico is the most attractive emerging market for investors, based on a range of metrics analysed by Bloomberg including growth, yields and equity valuations. India is the worst.

Mexico’s currency slid and bond yields surged as President Donald Trump was elected in November after lambasting the country for stealing US jobs. Even after an initial sell-off subsided, the 10-year bond yield is still more than a percentage point above where it was before the election. The peso’s real-effective exchange rate is close to a 21-year low, boosting the earnings outlook for exporters.

“Both Mexico’s currency and bonds have been sold too much,” said Akira Takei, who helps oversee the equivalent of $440bn as a fund manager at Asset Management One Company in Tokyo. He said the expectation the dollar would weaken had convinced him to hold a higher proportion of pesos and Mexican government bonds in his portfolio than recommended by the benchmarks he followed.

Read more…

U.S. farm heartland lobbies to steer Trump away from Mexico trade war

3/22/2017 Reuters

pigsFarmers in the U.S. agricultural heartland that helped elect Donald Trump are now pushing his administration to avoid a trade dispute with Mexico, fearing retaliatory tariffs that could hit over $3 billion in U.S. exports.

The value of exports at risk is based on a Reuters analysis of a tariff list which Mexico used in a trucking dispute six years ago and which Mexican officials have said could serve as a model if President Trump sets new barriers to Mexican goods.

Pork producers contacted Trump’s transition team soon after the Nov. 8 election to stress that tariff-free access to Mexico has made it their top export market by volume, said John Weber, president of the National Pork Producers Council.

The council has sent the administration multiple letters, including one signed in January by 133 agricultural organizations, and is arranging for several hog farmers to fly to Washington next month to talk to officials.

Read more…

Mexico warns firms not in their interest to build border wall

3/22/2017 Reuters

GettyImages-624165050Mexico’s government on Tuesday warned Mexican companies that it would not be in their best “interests” to participate in the construction of U.S. President Donald Trump’s border wall, though there will be no legal restrictions or sanctions to stop them if they tried.

While some Mexican companies stand to potentially benefit from the controversial infrastructure project, residents south of the border view the wall and Trump’s repeated calls to have Mexico pay for it as offensive. That is putting public pressure on firms to abstain from participating.

“We’re not going to have laws to restrict (companies), but I believe considering your reputation it would undoubtedly be in your interest to not participate in the construction of the wall,” said Mexican Economy Minister Ildefonso Guajardo.

Read more…

Better Year For Mexico’s Billionaires, As Fortunes Climbed 17%, Carlos Slim $4.5 Billion Richer

3/20/2017 Forbes

carlos slimMexico’s billionaires are now richer than a year ago. Despite a weak currency and a sluggish economy, the combined net worth of Mexico’s billionaires climbed 17%, from $99.6 billion in 2016 to $116.7 billion, according to the 2017 Forbes Billionaires list released Monday. Their aggregate wealth, however, is still below the $148.6 billion of their 2013 peak year.

With a net worth of $54.5 billion, Mexican telecom mogul Carlos Slim Helú, Mexico’s richest person, is  $4.5 billion richer than in 2016.  Nevertheless, Slim moved down for the second consecutive year in the 2017 Forbes world’s billionaires rankings from number four to number six position, the first time he’s been out of the top five in a dozen years.

Read more…

U.S. Homeland Security seeks proposals for wall with Mexico

3/18/2017 Reuters

500px-US_Department_of_Homeland_Security_Seal.svgThe U.S. Department of Homeland Security has issued requests for proposals for prototypes for a wall along the Mexican border, saying ideally it should be 30 feet (9 meters) high and the wall facing the U.S. side should be “aesthetically pleasing in color.”

A wall to stem illegal immigration was one of Donald Trump’s main campaign promises and has been highly controversial. The president has vowed to make Mexico reimburse the United States for its cost but Mexico has repeatedly said it will not do so.

Earlier this week, the White House requested $3 billion more for Homeland Security, with some of that intended for planning and building the border wall.

According to one document posted online by U.S. Customs and Border Protection Friday night, the wall should be 30 feet high, built using concrete, and “physically imposing.” However, it says designs over 18 feet (5.5 meters) high could be acceptable.

Read more…