NEW YORK/MEXICO CITY (Reuters) – Latin American local currency debt, both corporate and sovereign, is a good investment given the global liquidity glut has pushed up the price of U.S. dollar bonds, Lazard Asset Management portfolio manager Denise Simon said on Tuesday.
Strong demand for local debt from Mexico, Uruguay and blue-chip companies such as Mexico’s Televisa and America Movil reflect a shift towards selecting securities based on individual merit rather than a broad play on emerging markets, she said.
MEXICO CITY, May 20 (Reuters) – Mexico’s banking reform will
take two or three years to have an impact on credit and access
to financial services, said the chairman of Mexico’s largest
locally-owned bank, Grupo Financiero Banorte.
The reforms, unveiled earlier this month, aim to increase
lending in Latin America’s second-largest economy to improve
development of the small business sector and boost growth.
MEXICO CITY/RIO DE JANEIRO (Reuters) – Foreign investors flocked back to Brazil in early 2013, prompting the strongest stock market inflows in more than two years, but massive bets on share price falls suggest no change in sentiment towards Latin America’s largest economy.
Central bank data shows foreign inflows to Brazil’s stock market almost tripled in the first quarter from the previous three-month period to $7.74 billion, more than the net inflows for the whole of 2012 and the strongest quarter since late 2010.
MEXICO CITY, May 17 (Reuters) – Mexico’s annual growth
slumped sharply at the start of 2013 to its weakest in three
years despite unexpected strength in the services sector,
backing expectations of a further interest rate cut later in
Figures on Friday showed that although Latin America’s
second-biggest economy escaped an expected contraction in the
first quarter, annual growth dived to its lowest since a deep
recession in 2009.
Separate data showed economic activity in March contracted
by the most in over three years as well.
Mexico’s economy grew 0.45 percent in the first quarter
compared with the final quarter of last year, the
national statistics agency said, outdoing forecasts in a Reuters
poll for a 0.05 percent contraction. The figure was below a
downwardly revised 0.67 percent growth rate notched the prior
But growth compared to a year earlier came in
at just 0.80 percent, falling short of expectations for a 1.25
percent expansion in a Reuters poll and below year-on-year
growth in the previous quarter of 3.2 percent.
Growth was crimped due to economic weakness in the United
States. Early Easter holidays reduced working days in the first
quarter, compared with the year-earlier quarter, since Easter
fell in April in 2012.
In addition, Mexican public sector expenditure ebbed, common
at the beginning of a new presidential administration.
Mexico’s central bank has already cut benchmark interest
rates to a record low 4 percent and is expected to cut further
later this year once a spike in inflation subsides. Slowing
growth bolsters the case for lower rates.
“There is a possibility of an interest rate cut, provided it
is combined with (the right) monetary conditions … and that
depends on whether the exchange rate continues to appreciate or
not,” said Sergio Martin, an economist at HSBC in Mexico City.
Mexico’s peso, which is up more than 4 percent this
year, slipped to a more than three-week low and yields on
Mexican interest rate swaps edged down as the market
reinforced bets on at least another 25 basis point cut.
The larger-than-expected GDP increase in the first quarter
versus the final quarter of last year was driven by strong
growth in services such as media and real estate, up 1.48
percent in the quarter, while activity in the primary sector –
encompassing agriculture, forestry and fisheries — fell,
adjusting for seasonal factors.
“There is no doubt that … you are looking at annual growth
around 3 percent if you are an optimist,” said Rafael de la
Fuente an economist at UBS in Stamford Connecticut.
The government has said it expects growth of around 3.5
percent this year, down from 3.9 percent in 2012.
MEXICO CITY, May 8 (Reuters) – Fitch Ratings upgraded
Mexico’s sovereign foreign currency credit rating by one notch
to BBB-plus on Wednesday, pointing to the country’s solid
economic foundations and welcome progress on reforms.
The surprise move will help reduce Mexico’s already-low
borrowing costs. It boosted the peso, which firmed past
the 12-per-dollar level for the first time in nearly two years.
MEXICO CITY (Reuters) – Tax breaks for attending “civic values” courses, tax-free sales of second-hand furniture, special treatment for call centers and an informal economy employing six out of 10 workers are all in the line of fire as Mexico prepares a long-awaited tax overhaul.
An analysis of budget data shows Mexico’s extensive network of tax breaks and stimulus programs generate costs equal to about half the taxes actually collected.
MEXICO CITY, April 26 (Reuters) – Mexico’s central bank on
Friday brushed off a recent pick-up in inflation, keeping the
door ajar for a possible further relaxation in credit costs if
stimulus in advanced economies fans capital inflows.
The Banco de Mexico held its benchmark rate at record low of
4 percent, as expected in a Reuters poll, after it cut borrowing
costs for the first time in nearly four years in March.