Business Hates Mexico’s Presidential Front-Runner. And He Doesn’t Care

05/09/2018 Bloomberg

Source: Eneas De Troya, Flickr

Andrés Manuel López Obrador, sharing a stage with crates of coconuts and limes, looks out upon a crowd of thousands: a sea of sombreros bobbing in the sun. They’re farmers, mostly—or used to be, before the North American Free Trade Agreement upended the old traditions here in the Mexican heartland. Now, many take whatever jobs they can find and lament that so much corn, Mexico’s iconic national crop, is now imported from the U.S.

López Obrador—or AMLO, as he’s widely known—assures the crowd that their dreams of returning to their farms are within reach. After he wins the presidential election on July 1, he says, he’ll provide them with free fertilizer and cheap fuel, and he’ll establish minimum price guarantees for homegrown crops. The fields here in the central Mexican state of Zacatecas will spring back to life, which will provide people with jobs and, in turn, stem the outward flow of migrants to America. But for this chain of prosperity to kick in, there’s one condition: An electoral deathblow must be struck against the ruling political class, a group López Obrador references in terms this rural audience appreciates.

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Mexican presidential candidate López Obrador open to international help to fight drug violence

05/09/2018 NBC News

amloMexican presidential frontrunner Andrés Manuel López Obrador on Tuesday said he was willing to enlist international organizations to help fight drug violence and corruption, countering critics who have said the nationalist candidate might resist working with foreign bodies.

The leftist former mayor of Mexico City, López Obrador has become voters’ firm favorite ahead of the July 1 election, vowing to lower violence, attack decades of political graft and focus attention on the poor.

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Mexican companies hedge, delay deals as NAFTA, elections loom

04/30/2018 Reuters

Source: Eneas De Troya, Flickr

Mexican companies are delaying investment, bringing forward imports to protect against currency swings and warning the next few months could be volatile as the NAFTA trade talks reach a climax and July’s presidential election nears.

From bakers to retailers and construction firms, more than a dozen of Mexico’s biggest companies cited concerns over NAFTA and the election when issuing conservative guidance in recent weeks, despite economic data pointing to an uptick in Latin America’s second-largest economy.

Grupo Bimbo (BIMBOA.MX), the world’s largest breadmaker, said it was delaying capital expenditure and tightening costs due to a volatile economic environment amid the presidential campaign.

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Mexican Election Could End the Welcome for U.S. Oil Giants

04/26/2018 The New York Times

energy- oil pumps 2As President Trump moves to recast trade and border relations with Mexico, American oil companies are worried that the prospective winner of Mexico’s presidential election will play his own nationalist card.

The leading candidate, Andrés Manuel López Obrador, wants to reverse policies that have tied a knot between Mexico and the United States in recent years in energy production and consumption. And he has promised to make sure that oil never falls “back into the hands of foreigners.”

In addition to threatening refinery profits in the United States, his proposals could slow down oil production in Texas and impede deepwater drilling in the Gulf of Mexico by international oil giants like Exxon Mobil and Chevron. They would also jeopardize the United States energy trade surplus with Mexico, which reached roughly $15 billion last year.

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Mexico’s Obrador Threatens Probes If Airport Isn’t Halted in July

04/18/2018 Bloomberg

amloMexico’s left-wing front-runner wants a $13 billion airport project halted immediately should he win election in July, threatening officials with legal action if they wait until he assumes power in December, according to his pick for transportation minister.

Andres Manuel Lopez Obrador will ask President Enrique Pena Nieto to suspend the project in July to allow for the incoming administration to carry out audits on the airport’s construction and finances, said Javier Jimenez Espriu. Moreover, contractors can’t expect cancellation fees if the project is scuttled.

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UBS Sees Mexico Market Risk From Lopez Obrador’s Party, Not Him

04/12/2018 Bloomberg

Source: Eneas De Troya, Flickr

Forget about dominant Mexican presidential candidate Andres Manuel Lopez Obrador. If you want to buy the post-election dip, watch for Congressional gains by his left-wing party, according to UBS Group AG.

While investors are prepared for victory by Lopez Obrador on July 1, a solid win by his Morena party in Congress — even short of a majority — would weaken opposition to his administration and spook markets, said Esteban Polidura, the Swiss bank’s chief investment officer for its Mexico unit. Yet assets will rebound from an initial selloff as Lopez Obrador proves to be less of a threat to the strength of Mexico’s economy, Polidura said.

Airport Bonds Show That Mexican Traders Learning to Live With AMLO

04/11/1018 Bloomberg

amloInvestors in at least one corner of Mexico’s markets are making peace with Andres Manuel Lopez Obrador.

Green bonds backing the construction of Mexico City’s new $13.3 billion airport have been among the country’s best performing debt in the past few weeks as the presidential front-runner often referred to as AMLO pledged to make sure holders of $6 billion of notes would be protected even as he reiterated promises to shut the endeavor down if he wins.

That reassured traders who were already gaining confidence after the group behind the airport raised $1.6 billion last month in an initial public offering of a REIT-like securities tied to the project, a move that created a broader base of investors who would object loudly to any attempts to derail it. The debt had lost 11 percent this year before the Fibra E offering as Lopez Obrador, a left-wing former mayor who is trying to shake the perception that he’s hostile to business, solidified his lead in pre-election voter polls.

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