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Tuesday, June 28, 2011

Mexican Market Spotted for Expansion of Colorado Potato

In keeping with the theme of environment and the Mexican market, here is an article on introducing the Colorado potato in Mexico.

The San Luis Valley potato farmers are looking to expand their export market to all of Mexico, due to an unsettled economic environment in San Luis Valley.

The Colorado Agriculture Commissioner, John Salazar, is leading the delegations from Mexico, the US Department of Agriculture, and local potato growers through the San Luis Valley.

On looking for an expanded reach into the Mexican market, Edward Avalos, Under Secretary for Marketing and Regulatory Programs at the US Department of Agriculture says, “We all want access for our potatoes to go to the inner portions of Mexico", adding that with everyone wanting the same thing it is just a matter of looking at all the options and finding something that works for everyone.

“We will be looking at every option we can,” Avalos said. “We are going to work hard on this. I believe we will work together, because we have a good relationship with our counterparts in Mexico.”

Current laws limit the range into Mexico for sales of fresh potatoes from the United States to 26 kilometers (16.16 miles.)


Foreign Investment in Mexico on the Rise

Foreign Investment is on the rise in Mexico. This article, posted today, notes that an increase in manufacturing rates is assisting the growth of the Mexican economy as a whole over the past year.

In 2010, Mexican manufacturing rates increased to 2.261 million vehicles, a staggering 50% increase from 2009. Mazda is the greatest example of increased foreign investment in manufacturing, who recently announced a $500 million investment in a new plant in Guanajuato, Mexico. On top of the startling quantity of automobile companies looking to expand operations to Mexico, the rapid growth of the aircraft and steel industries also play a crucial role in increased manufacturing rates. Click here to find out what top companies are spurring foreign investment in Mexico.


Mexico Economic Activity Climbs

Due to the jump in tourism during this year (to over 22 million foreign travelers), the Mexican services sector rose, helping Mexico's economic growth beat analysts' expectations in April.

The services sector expanded by 0.39 percent in April while the other two sectors of the economy declined in month-ago terms. The industrial sector contracted 0.14 percent, its third-straight decline, while the agriculture sector was off 2.04 percent.

Although the year-over-year number was lower than expected, Mexico's economic activity is up in April by 0.35% from the previous month where analysts had predicted a rise of 0.20 percent.

Economists expect the economy could expand by roughly 4.5 percent this year after posting a 5.5 percent growth rate in 2010 -- the strongest in a decade.


Mexico: Avocado Orchards Affected by Climate Change

Climate change has been exaggerated in Mexico by the increase in planting avocado versus foresting and in turn, is impacting the orchards of this fruit negatively. The Secretary of Environment and Natural Resources of Mexico, Juan Rafael Elvira Quesada, pointed out that the forest is what dampens the climate change.

In Michoacán there are more than 100 hectares of avocado fields. The avocado is the main agricultural export product and the 80% of avocado orchards are located in all natural, rain-fed land.

Juan Elvira is concerned about illegal changes in land use [from foresting to planting avocados] because "if this phenomenon continues", he believes that, ironically enough, 'the number one enemy of the avocado in the Michoacán area will be precisely the climate change'.


Monday, June 27, 2011

Mexico Stocks Advance

Here is an update on advances in the Bolsa Mexicana de Valores SAB for 4pm, June 27, 2011:

The IPC index rose 0.7 percent to 35,601.73. The exchange halted trading twice during today’s session to address sluggishness in its an operating system installed during the weekend, Bolsa Mexicana de Valores SAB said in an e-mailed statement.

Grupo Comercial Chedraui SA (CHDRAUIB MM), a supermarket chain based in Xalapa, Mexico, climbed 0.9% to 36.97 pesos. Chedraui was rated “overweight” in new coverage at HSBC Holdings Plc, according to an e-mailed research note.

Industrias Penoles SAB (PE&OLES* MM), Mexico’s largest silver producer, declined 0.6 percent to 433.06 pesos. Silver futures for September delivery fell for a third day.


Mexico Credit Status: Bonds Fueled by Slowing Inflation

June 27 (Bloomberg) -- Mexican bonds are posting their biggest gain in 10 months.

Due to speculation that slowing inflation will prompt the central bank to keep interest rates at a record low, the yield on government bonds dropped 22 basis points since June 17, for notes due in 2020.

In comparison to other leading Latin American economies, yields on Brazil's real-denominated bonds climbed 0.09 percentage points (nine basis points) to 12.41%, during the same time period for bonds maturing in 2021.

"The fundamental story of inflation is just very positive," Alberto Bernal, head of fixed income research for Miami-based Bulltick Capital Markets, said in a telephone interview. "We've been very vocal about being long in the long end, and so far so good."

Alejandro Padilla, a debt strategist at Grupo Financiero Banorte-Ixe in Mexico City, said in a telephone interview, "There's a positive effect from the exchange rate. Their inflation reports keep showing signs that there aren't inflationary pressures on the side of internal demand. We don't see any factors that could push the Mexican central bank to move up its tightening cycle."

Alejandro Padilla said his recommendation to investors would be to buy Mexico peso bonds maturing in 2013 and 2015.

Read more:

Secretary Quesada Discusses a Greener, more Prosperous Economy

Honored for his commitment to climate change and his leadership in global public policy at the United Nation's Champions for the Earth award ceremony, Secretary Quesada talks about the changes that Mexico has made and will continue to make that will lead to a greener, more advanced Mexican economy.

Carstens Receives Last Minute Support from Canada and Australia

The breaking news today is that Canada and Australia will endorse Mexico's central bank chief Agustín Carstens as the race for the spot as IMF chief comes to an end this week. Canadian officials made this announcement on Friday - a decision that is, unfortunately, deemed by the WSJ as, 'unlikely to tilt a race led by French finance minister Christine Lagarde'.

Europe has backed Ms. Lagarde from the beginning, and there is no indication Washington will withhold support for her to succeed former chief Dominique Strauss-Kahn.


Friday, June 24, 2011

Mexico's Prices Fall, Led by Food

Mexico’s consumer prices unexpectedly declined in the first half of June, significantly brought down by food and beverage costs in Latin America’s second-biggest economy. Even though economists had forecasted a 0.11% rise, prices fell 0.05% in the first two weeks of June, with food and beverage prices falling 0.40 percent.

The central bank reported these numbers today, and HSBC Holdings Plc economist, Sergio Martin, added that controlled prices are allowing the central bank to keep borrowing costs at a record low: “There are no inflationary pressures that could make the central bank raise rates,” Martin said in an over the phone interview from Mexico City. The report “was much more positive than what you could have expected.”

According to Martin, Mexico’s exchange rate is 'keeping a lid' on prices. The peso is up 10% since the end of 2009, the biggest advance among Latin American currencies after the Colombian peso.

Click here to read more on how Mexico's exchange rates are assisting it's economic boom.

Mexico Experiences Biggest Trade Surplus in 15 Years

Today Reuters reported that Mexico exported $23.5 billion in factory goods in May compared to $22.9 billion in the previous month. In March, "Mexico posted its biggest monthly trade surplus in more than 15 years" as the Mexican economy benefitted greatly from higher gas prices as the United States' primary crude supplier.

Mexico's economy is expected to grow around 4.5 percent this year on factory exports and a rekindling of domestic consumer demand following the 2008-2009 recession.

Click here to get the full report on the increase in trade dollars.

More Foreign Investment in Mexico Has Lead to A Protected Economy

From El Financiero:

El Financiero reported today that foreign institutional investors put more money into Mexico during the first quarter of this year compared to same quarter last year, creating a barrier against the negative effects of the global economy. The board also analyzed what impact the EU, particularly Greece, might have on Mexican economics.

Read the entire report here. (Report in Spanish)

"Mexico's Bullet-Proof Economy"

Today the Financial Times has published an article on their economic blog, "beyondbrics", that talks about how Mexico's economy is doing very well, surpassing all predictions, despite the unrest at the U.S.-Mexico border.

Mexico, more and more, is proving to be extremely stable in macroeconomic terms and in its relations with other countries, providing a sound platform for business activity.

The article mentions that this actually isn't an uncommon scenario. If you take Columbia for instance, the economy grew remarkably between 1980 and 2010, when the country was at a zenith in it's fight against crime. Mexico's economy is rapidly growing, proving a stable place for investment. What has your experience in investing in Mexico been in the recent years or months?

All comments are welcome.

Thursday, June 23, 2011

The Rise of Mexico's Aerospace Industry

From The Financial Times:

Aerospace is the latest technical sector to spring up in Mexico. In the last 10 years, the total of aerospace companies operating in the country has risen to 238, with exports of roughly $3.5bn a year. Annual average growth has been 20 per cent a year since 2002.

“Simply put, Mexico is becoming more competitive,” says Bruno Ferrari, the country’s economy minister.

Carlos Bello, director-general of the Mexican Federation of Aerospace Industries (Femia), says he expects exports to reach $12 billion by 2020. He also stated that he expects a rise in Mexico's place from 14th place today to one of the top 10 most important aerospace manufacturers.

CEMEX Scraps $650 Million Bond Offering

Cemex SAB, the largest cement maker in the Americas, scrapped a $650 million bond offering today. The company pulled the sale of eight-year bonds because of “volatility” in global markets, said Jorge Perez, a spokesman for the Monterrey, Mexico-based company.

Cemex, battered by a slowdown in the U.S., its biggest foreign market, had planned to sell the bonds to repay debt stemming from a $15 billion loan in 2009 that helped it refinance in order to avoid default. The company needs to pay back $200 million of debt by the year's end to prevent the interest rate on $7.6 billion of loans from rising by 50 basis points.

From the report: "The yield on Cemex’s benchmark dollar bonds due in 2020 jumped 40 basis points, or 0.40 percentage point, to 9.74 percent at 5 p.m. New York time, the highest since October. Jack Deino, who oversees approximately $1.8 billion of emerging-market debt at Invesco Inv. in New York, said "For Cemex, what’s going to move it or break it is the recovery of the construction market in the U.S."

Wednesday, June 22, 2011

Despite Violence, Juarez Economy is Booming | México Today

Despite Violence, Juarez Economy is Booming | México Today

Recently, highlighted Juarez, one of the cities on the U.S.-Mexico border leading the way for the Mexican economy. According to Bob Cook, the president of the El Paso Regional Economic Development Corporation (REDCO), “What we see happening in Juárez right now is a city of competing realities. We have this mostly cartel-related violence taking place, but interestingly, while that is happening, Juárez is leading Mexico in almost every industrial indicator, in terms of new jobs and investment."

While the media focuses on portraying a single view of Mexico, the reality is that investment opportunities are at an all-time high and the Mexican economy is seeing continued growth.

Made in Mexico: The New China

It's no secret that Mexico's economy is booming...but did you know that it's becoming the new China in terms of exports? Mexico's place as an emerging market is largely due to it's export industry. Mexico's share of the global export industry was 12.5% in 2010, the highest in a decade. While the perception has been that China's cheap labor and large production capabilities are greater than Mexico's, the Financial Times states that Mexico could become the U.S.'s second-largest source of imports.

What are your thoughts on the subject? Do you think Mexico is bound to become the next China? In what ways?

Please leave me your comments below :)

Mexican Retail Sales Accelerate in April

From Reuters:

The news has come out that Mexican retail sales jumped in April from March, largely due to stronger consumer demand. Reuters reported that 'growth in year-over-year retail sales accelerated to 4.9 percent MXRSLY=ECI in April'. These numbers symbolize Mexico's growing economy empowered by its large export industry that caters to the United States.

The economist Alberto Ramos of Goldman Sachs said private consumption growth should rise in the near future due to improvement in the labor market and stronger credit flows.

"Mexico's economy is expected to expand by more than 4.5 percent this year, largely because of industrial output as factories churn out goods for the U.S. market."

Tuesday, June 21, 2011

Mexico's Plastic Industry Applauds Mazda's $500 Million Dollar Investment

On the topic of investment in Mexico, Mazda Motor Corp.’s decision to build a $500 million car and engine assembly complex in central Mexico in partnership with Sumitomo Corp. has been applauded by the Plastic Industry in Mexico. Sector Leader Eduardo Martínez Hernández says it is a boost for the Mexican plastics industry.

In an interview with Plastic News, Martínez said that the automotive industry buys about 4 percent of all the plastics consumed in Mexico. According to Mexico City consulting group, Grupo Texne, in 2010, manufacturers in Mexico processed 9.98 billion pounds of plastics, 4.6 percent more than in 2009.

“I don’t have any information about what they will produce at this Mazda plant. What I can say is that 25 percent of the content of all automobiles assembled in Mexico is plastic and so, sure, the fact that there is to be more car production will help a great deal,” said Martínez, president of plastics industry association Anipac (Asociación Nacional de Industrias del Plástico AC).

For the full story on the impact of this investment in Mexico, click here.

Home Sales Fall in U.S.

Home sales fell 3.8 percent in the month of May to a seasonally adjusted annual rate of 4.81 million homes, the National Association of Realtors said today - which is far below the usual 6 million annual sales rate that's the norm in a healthy housing market.

Since the burst of the housing bubble in 2006, annual rates have fallen four times in the past five years. Sales are expected to level off at about 5 million a year, analysts say. The figure comes too close to 4.91 million homes sold in 2010, the worst sales rate in the past 13 years.

The depressed housing market has weighed on the broader economy. Declining home prices have kept people from selling their houses and moving to find jobs in growing areas. They have also made people feel less wealthy. That has reduced consumer spending, which drives about 70 percent of economic activity.

Read more here.

Cartstens Promises to Boost Emerging Economies if Chosen for IMF

The head of Mexico’s central bank, Agustin Carstens, said today that if chosen as the top official at the International Monetary Fund he will work to increase representation for developing countries. He also spoke of increasing the IMF’s abilities to deal with financial crises, something that after managing the economic crisis of 2008 and with vast experience as the head of Banxico, he is well suited to do.

Agustin Carstens told the IMF’s 24-member executive board today that the world’s emerging economies needed a bigger voice in IMF decisions.

What is your opinion on the topic?

Source: The Washington Post

The Most Common Mistakes Made by Investors

Here is a video that will make you take a good look at how you make your investment decisions. An amazing resource for any individual investor.

Monday, June 20, 2011

Job Growth in Mexico's Maquila Sector

Although it's reported that 6 maquilas in Mexico have closed, the Mexican Statistics Agency (Instituto Nacional de Estadistica, Geografia e Informatica or INEGI) has reported that they've created over 1,000 new jobs in the Ciudad Juarez area, where many of the maquila industry is located.

Source: Maquila Portal

China's Boom Beginning to Fade

Several economists in China have begun to lower their growth forecasts for this year and next year to about 8.5 percent, from earlier forecasts of 9 percent to 10 percent, and have started to warn about the possibility of a sharp rise in nonperforming loans at big state-owned banks.

Apparently, Chinese businesses are also trying to cope with rising labor costs, energy shortages and higher borrowing costs due to the global economy and the increasing in Chinese debt.

While few analysts say China’s growth will slow to less than 8 percent in the next year, more are painting a troubling picture. The Chinese stock market has been in a slump for much of the past two years, the real estate market looks weaker and inflation is running at a 34-month high, according to recently released data.

These reports are making investor's rethink the Chinese economy. They are being released at a time of heightened concern about slowing economic growth in other parts of the world, including the United States, Europe and Japan.

What are your thoughts on the global stock market? Do you think China's grip on the global economy is beginning to loosen? Or is this simply a phase that China is bound to surpass?

All comments are welcome.

The Boom of the Mexican State

In 2010, contrary to all predictions, the Mexican economy grew by 5.5% — the fastest rate in a decade and well above the usual growth rates.
In the U.S., sociologists are puzzled over the paradox of falling crime rates in an era of high unemployment and economic uncertainty. The Mexican paradox appears to be the reverse.

These are a few of the positive data points for Mexico:

1) The Mexican peso grew stronger against the dollar.

2) The Mexican inflation rate was essentially flat.

3) Foreign reserves in Mexico grew to $113 billion.

4) 22 million tourists visited the country.

5) Trade with the U.S. reached all-time highs of almost $400 billion.

6) The maquiladora industries added some 20,000 jobs in Ciudad Juarez.

7) The percentage of the population living below the poverty line declined to 47.4% in 2008 (the last year for which the World Bank has data) from 63.7% a decade earlier.

8) Literacy rates started to surpass the 90th percentile.

9) Life expectancy continues to rise to near-First World levels.

10) Foreign investment in Mexico keeps growing to surpass each previous year's level and is expected to reach high growth rates in the future.

Source: The WSJ online

Mazda Motor to Open Plants in Mexico Through Joint Venture

Mazda Motor has formed a joint venture company with Japanese trading company Sumitomo. They've made an investment of $500 million dollars to set up a factory in Mexico for the production of the Mazda2 and Mazda3 compact cars, as well as engines. The Japanese trading company and Mazda are trying to take advantage of the growing Central and South American economy. They will also be expanding into Brazil for the same reasons.

The plant is going to be built in Salamanca city, Guanajuato state, just north of Mexico City and is expected to start operations in the fiscal year 2013 (April 2013 to March 2014). The factory will produce 140,000 vehicles per year primarily for Central and South America.

Read more on the story here

Friday, June 17, 2011

Bancomer Selects Hypercom for Mobile-Payment System

From the Paypers:

Mexico-based financial institution BBVA Bancomer has selected payment technology company Hypercom to deploy it's 10,000 Optimum M4230 mobile payment systems to its merchant customers.

Hypercom’s services now fulfill the electronic transfer needs of banks and other financial institutions like processors, retailers, merchants, as well as users in the transportation, petroleum, healthcare, prepaid and self-service.

What do you think is the future of mobile banking and who will be the leaders of this new business?

The Future of Mobile Payments

This is an interesting video that reveals the future of mobile payments in the U.S. Do you have an insiders view on what mobile payments will be in Mexico and Latin America? How does it influenced by the U.S. and how does it differ?

All comments are welcome.

Carstens Says Too Early to Comment on Japan's Support

From Reuters:

Mexican Central Bank Governor Agustin Carstens, a contender to head the International Monetary Fund, said on Friday that it would be premature for him to comment on whether he earned Japan's support for his bid to become head of the fund.

Carstens, speaking to reporters after meeting Japanese Finance Minister Yoshihiko Noda and Bank of Japan Governor Masaaki Shirakawa, said he explained his views on the fund and his ideas on Japan's role.

"The Japanese finance minister listened very carefully to my position," Carstens told reporters. "It is still premature, but I had a good discussion with him."

As we all know, Carstens is running against French Finance Minister Christine Lagarde to replace IMF Chief Dominique Strauss-Kahn. It seems as though Carstens, although cautious in his statements, is optimistic about Japan's support for his bid to the IMF presidency.

What do you know about financial relations between Japan and Mexico? Is their good reason to believe that Japan will support Mexico's Chief instead of Lagarde?

News on Bancomer

From Bloomberg:

Grupo Financiero BBVA Bancomer SA, who may turn over cash to its Spanish parent bank has made investors start to sell-off the lender’s bonds, making them attractive to ING Groep NV and Aberdeen Asset Management Plc.

Yields on the Mexico City-based bank’s $1 billion of bonds due in 2020 have risen 31 basis points, or 0.31 percentage point, this year to 6.65 percent yesterday, according to data compiled by Bloomberg. The average borrowing costs for Latin American banks dropped 27 basis points during the same period to 5.58 percent, Credit Suisse Group AG indexes show.

Get the full story here.

Thursday, June 16, 2011

Greek Cabinet Changes: Sarkozy & Merkel Urge Change

French and German leaders are starting to agree on how to rescue Greece from a European bailout.

The Greek cabinet has been changed by Greece Prime Minister George Papandreou, consequentially giving a boost to the euro and Wall Street.

This change in the Greek cabinet is a result of some of the EU’s stronger core countries push for a resolution to Greece’s fiscal debt crisis.

French President Nicolas Sarkozy and German Prime Minister Angela Merkel showed a united front on the need for a deal in the next few weeks, but offered few details of when and how such a deal will get done – or who will pay for it.

Former Greek defense minister Evangelos Venizelos will take over as finance minister from Giorgos Papakonstantinou, the author of the wildly unpopular, albeit necessary, austerity programs, who is begin reassigned to an environmental post.

Source: Forbes

Siliken Introduces New Model in Tijuana, Mexico

From Puerto Vallarta Magazine:

Alfredo Puche, CTO and VP of Siliken, the Spanish solar energy company, announced at an inauguration event at the Intersolar Exhibition in Tijuana that Siliken has started manufacturing solar modules in Tijuana, after an investment of US$25 million and with an initial labor force of 180 people from Tijuana.

Alfredo Puche reported that Siliken-Tijuana Mexico started operations in the first quarter of 2011 with an ambitious operations plan to manufacture solar panels for the US market, with plans to grow within 2 years to 500 people, a sign of the confidence in Tijuana's capabilities.

“We are inaugurating our fifth plant in the world and second in Latin America. Siliken Tijuana has three production lines. Last February works started to create an industry around renewable energy with solar silicon purification for power development”, Alfredo Puche further said.
The sales team of Siliken showed its clients the newest products, such as the online configurator energyBox and its Premium Partner Program.

Siliken chose the Intersolar Exhibition to present the new 72-cell module to its clients for the first time. With these modules, 20 percent fewer modules need to be installed, generating the same power and saving operating costs.

Original Source: Maquila Portal

U.S. Exports Lead Poisoning to Mexico With Used Batteries

It has been reported that lead battery exports are contributing to lead exposure in Mexico. The reported levels detected greatly exceed the allowed by the U.S. government on the job and in the environment. This information has been found out by two environmental organizations, one on Mexican and another on U.S soil.

Usually less strict environmental and occupational safety regulations in Mexico make it profitable for U.S. companies to ship batteries to Mexico for recycling, the report finds.

The report, "Exporting Hazards: U.S. Shipments of Used Lead Batteries to Mexico Take Advantage of Lax Environmental and Worker Health Regulations," finds that from 2009 to 2010, exports of used lead batteries to Mexico more than doubled. The authors of the report found that roughly 12 percent of used lead batteries generated in the United States are exported to Mexico. They also note in the report that the use battery exports from the U.S. to Mexico are on the rise since the tightening of U.S. air quality standards in 2008.

"This report raises serious concerns about the contribution of used batteries from the U.S. to lead poisoning south of the border," said Perry Gottesfeld, executive director of Occupational Knowledge International. "It is remarkable that both governments allow U.S. companies to export batteries to Mexico where there is neither the regulatory capacity nor the technology in place to recycle them safely," Gottesfeld said. "There are significant health effects from lead at the exposure levels we have documented."

The U.S. Agency for Toxic Substances says lead can damage the nervous system, kidneys, and reproductive system.

The report was conducted between November 2010 and May 2011 and evaluated lead battery recycling facilities across Mexico and the United States. Click here to view the report.

Read the entire article on the report here.

PayPal and Digital River Expand Online Payment Service Agreement in Mexico and Brazil

Now Mexico and Brazil have greater access to PayPal online payment services in a deal with US e-commerce services developer Digital River. The system now supports local online payment processing in Brazil and Mexico.

Digital River World Payments service provides service options such as checkout page optimization, fraud detection, services to manage currency risk and business intelligence tools, among others. The payment service is available in more than 190 countries and supports over 170 transaction and display currencies.

Click here for the full story.

Have you used this service in Mexico or Brazil? How would you rate the improvement?

Wednesday, June 15, 2011

Can Twitter's Mood Predict the Stock Market?

Can you really use what shows up on Twitter to beat the stock market? The case for being able to do so rests largely on this October 2010 study, published by Bollen, Mao and Zeng, which measured the correlation between “mood states” derived from largescale Twitter feeds and the Dow Jones Industrial Average over time.

See this Reuters article as well.

Have you ever noticed a shift in mood and changed your investment plans accordingly?

Leave me your comments below.

Gas Prices Outrageous- 5 Ways to Stop Speculators from Raising Oil Prices

The rise in gas prices is having a huge impact on American consumers...In this video, leading economists talk about the current economy and what steps are necessary to ensure more moderate gas prices. How has the push in oil prices affected you? Has it affected your business or the way you invest? I'd love to hear your comments.

Conflict of Interest for IMF Candidate Christine Lagarde?

Related to my last post, I wanted to show this video of Agustin Carstens talking about his IMF candidacy...In previous occasions he has mentioned that he will bring a 'fresh set of eyes' to the IMF presidency, and states that having French Finance Minister Christine Lagarde as head of the the IMF is comparable to 'starting a soccer match at 5-0'. Is it fair to have the main borrowers head-up the crediting institution?

Tell me what you think.

Profile: Agustin Carstens/Christine Lagarde

Lately I've been posting news on the race between Carstens and Lagarde to be the next managing director of the International Monetary Fund (IMF). As the BBC puts it, the two candidates competing to be the head of the International Monetary Fund (IMF), "could not be more different in their appearance" but...what about on paper?

Sometimes I've thought, how do we really know who would be a better pick for the position? Well, I found these BBC articles that review both of the candidates' careers and give us a good look at their credentials. Check out the aspiring candidates' resumes here: Agustin Carstens and Christine Lagarde

Tuesday, June 14, 2011

Mexico Moves Up 9 Spots on Global Competitiveness Index

According to the World Yearbook 2011, developed by the Strategic Studies Center of the Institute for Competitiveness and International Management Development (IMD), Mexico has moved up 9 spots in global competitiveness.

In the report, Mexico was rated better than some European countries like Portugal, Spain, Italy and Greece, after their competitiveness has waned due to financial problems. This new position places it above powerhouses such as Brazil and Russia and offers insight into what Mexico has in store for the global economy. Read the article to get the full perspective on Mexico's stance in the Global Competitiveness Index.

Mexico Produces, Exports Record Number of Vehicles

Mexico City.- The Mexican Automotive Industry Association (AMIA) informed this past May that the vehicles assembled and exported in Mexico reached a new record.

In a press conference, Eduardo Solis, Chairman of the Mexican Automotive Industry Association, said that these figures are the highest for a month of May ever; namely the assembly of 213,329 units and the export of 176,951 vehicles.

To add to the good news, Guillermo Rosales, the Head of Government Relations in the Mexican Dealerships Association (Asociacion Mexicana de Distribuidores de Automotores or AMDA) informed that domestic sales of vehicles posted an 11.4% increase from last year.

Source: El Norte

Mexico's Industries Invest $34 Billion USD In Foreign and Domestic Markets

Today it was reported that Mexican industrialists will invest US$34 billion in both domestic and foreign markets this year. Members of the Mexican Council of Businessmen (Consejo Mexicano de Hombres de Negocios or CMHN) informed President Felipe Calderon about this in a meeting held last Thursday.

“The sum to be invested in Mexico amounts to US$20.5 billion, while US$13.5 billion will be invested abroad, adding to US$34 billion”, Claudio X. Gonzalez, President, Kimberly Clark de Mexico, informed.

Source: Maquila Portal

Market Watch: Invest in Bonds Outside of U.S.

See market news and analysis that interviews Bill Gross, the founder of
PIMCO, on his thoughts about foreign investment. In the article linked below, he suggests that investors get out of U.S. Treasuries and invest in bonds from Brazil, Canada, Germany and Mexico.

Bill Gross says that the government bonds that are more attractive in terms of real return include those from Brazil, Mexico, Canada and Germany, adding that investors don’t have to go too far afield or delve into emerging markets if they are uncomfortable doing that while stretching for yield.

Read the full analysis and market advice here.

Mexico’s Carstens courting U.S. on IMF job

From The Washington Post:

The Mexican banker running to head the International Monetary Fund warned Monday that the agency could face a conflict of interest if his chief rival, a European, was appointed to the top job in the midst of the financial crisis roiling Europe.

Agustin Carstens, Mexican central bank chief, in Washington yesterday to lobby for the IMF post, said the International Monetary Fund needs to be seen as guarding the interests of all its members, not just those of the Europeans.

The fund can’t be perceived as working for Europeans,” he said. “I am sure she [Lagarde] will say she is working for the fund. But that question will be there.”

Read more on the fight for the IMF position.

Monday, June 13, 2011

Carlos Slim Sees Major Growth in Latin America

Carlos Slim, the Mexican telecommunications tycoon and the world’s richest man, intends to increase investment in Latin America to benefit from cheaper technology and the region’s increasing purchasing power before looking to break into other markets.

In an interview with the Financial Times, Mr Slim, who is the controlling shareholder of América Móvil, the region’s biggest telecoms company, said: “The fertile ground is Latin America . . . within 10 or 15 years, it is going to break the barrier of underdevelopment and it is going to form a large middle-class so we have to invest and invest heavily.”

Telmex and Government

Telefonos de Mexico SAB, the nation’s largest land-line phone carrier, said it won’t invest in rural parts of the country if the government doesn’t overturn new rules cutting its fees to connect calls to those areas by 95 percent.The company is going to ask the Communications and Transportation Ministry to overturn the Federal Telecommunications Commission rate cut, Regulatory and Legal Affairs Director Javier Mondragon said on a conference call yesterday. The reduction is legally unfounded, he said. Click here to get both sides of the story and a look at possible outcomes.

Mexican Shares Up

From the WSJ:

Mexican shares struggled to post gains early Monday as concerns about the global economy weighed down the buying interest.

Around 10:30 a.m. ET, the IPC index of Mexico's leading shares was up 0.2% to 35015 points on volume of 630 million pesos ($53 million).

The peso was also gaining, at MXN11.8590 to the dollar compared with Friday's close of MXN11.9030, which was its lowest level since the end of March. Lately, the peso has been tracking U.S. equities, but were posted tentative gains early today.

In local economic news, Mexico's industrial production rose a modest 1.4% in April from the year-earlier month. Local brokerage Vector said in a note that auto-parts shortages due to the Japanese earthquake and tsunami could continue to curb Mexican manufacturing in the months beyond April.

Scorpex Signs to Merge with Scorpex International

Scorpex International, Inc., formerly known as Scorpion International Waste Solutions, Inc., is a development stage company in the hazardous and toxic waste industry. With its first facility located near Ensenada, Mexico, Scorpex International is developing its first property for the storage, recycling, treatment, and disposal of hazardous waste. It is awaiting permits from the local and national government, and has already developed significant infrastructure on the 26-acre property.

"Merging Scorpex International with the Company marks a historic event in the development of Scorpex. I am pleased with the progress that Scorpex International is making in this region of Mexico and the waste disposal industry. We view this merger as a great opportunity to expand our shareholder base and create value for our shareholders. Furthermore, Scorpex has the opportunity to make a real positive difference with the environment," said Joseph Caywood, Chief Executive Officer.

Read more:

Afores (Pension Funds) Now Allow Outside Managers

The Mexican pension fund system
is going through a revolution, paving the way for greater opportunities for asset managers.

In March 2011, Consar, the Mexican pensions regulator, released a directive that allows pension schemes (Afores) to employ external managers to look after a portion of their assets.

This must come as good news for the asset management industry, considering that Mexican pension funds have now roughly $120bn of assets under management, corresponding to 10 per cent of Mexico’s gross domestic product.

Source: The FT

Abengoa to develop solar field of Agua Prieta II plant in Mexico

Abengoa, a developer of technological solutions for sustainable development in the energy and environment sectors, has announced that it will develop the new solar field of the Agua Prieta II plant located in the town of Agua Prieta, in the state of Sonora, Mexico.

The project, the first of its kind in Mexico, has been promoted by the Mexican Federal Electricity Commission (CFE) and supported by the Global Environment Facility (GEF) of the United Nations' Development Program. It is expected to start operating in about 2 years.

Abengoa will carry out the engineering, design and start-up of the new solar field. The solar field will use innovative solar-gas hybrid technology, as part of the new Agua Prieta II concentrated solar power (CSP) plant.

Click here for the full details.

Friday, June 10, 2011

Royal Dutch Shell to Invest in Gulf of Mexico

From Stocks and Shares TV:

"Royal Dutch Shell has a multi-billion dollar investment plan, and it is the latest step in Royal Dutch Shell plc (LON:RDSA)’s deep-water energy production activities in the Golf of Mexico.

The Cardamom project is expected to produce 50,000 barrels of oil equivalent (boe, or barrell of oil equivalent) a day at peak production and more than 140 million boe over its lifetime."

Read more about the investment in the original article.
Mexico's portfolio has reached a historical high, buoyed by strength in foreign investment, according to a research report Monday from Bank of America Merrill Lynch. Portfolio inflows increased to $39.4 billion in 2010 from $19.1 billion in 2009, the report said, almost a 50% increase. Read more about the historic high in foreign investment in Mexico here.

FEMSA to Invest $27 Million USD in Latin American Water

From Business News Americas- English:

The Mexican Beverage Company, FEMSA, has launched the Latin American Water Fund Alliance.
The alliance, after the initial 27 million USD investment, will install funds in Ecuador, Colombia, Peru, Brazil and Mexico. The Latin American Water Fund Alliance is a water conservation project which aims to protect valuable water resources in the region. Read more about the project here.

America Movil to Invest $1 Billion USD in Peru

The Mexican Company America Movil will invest $1 Billion USD in Peru over a three year span. America Movil is owned and operated by Carlos Slim, who recently debunked Bill Gates as the world's richest man. Latin America's largest telecommunications company will invest $350 million this year, continuing it's aggressive economic expansion in the region.


Calls for Investment at the U.S.-Mexico Border

The new coordinated border plan proposed today by the U.S. Chamber of Commerce touched on five areas: Trade, Infrastructure, Travel, Immigration and Security.

The public and private investment in such a program is needed to create a 21st century U.S.-Mexico border that will allow both countries to be secure and to compete in the global economy, the report said. Read more about the need to invest the U.S.-Mexican border here.

Mexico Opens Up To Foreign Oil Investors

The Mexican Petroleum industry has long been defined by an relying too heavily on major oil fields - Cantarell and Ku-Maloob-Zaap (KMZ) - and not investing enough in exploration. Mexico ranks sixth in the world as an oil producer but declines in production are setting the country on the path of becoming a net importer. See more on what Mexico opening up the market to foreign oil investors means.

Thursday, June 9, 2011

Lesson in Mexico's Monetary Policy: Part 4

The central bank is authorised to auction its reserves of US dollars if the peso depreciates by 2% or more against the previous day's close. In this way, the central bank can increase liquidity in the market and smooth volatility in the value of the currency.

In 2009 the central bank put in place a programme of interest-rate swaps for up to Ps50bn (US$3.7bn) to facilitate banks' liability management, enabling them to swap exposure to long-term fixed-rate instruments for short-term variable paper.

In January 2011 the IMF renewed Mexico's precautionary, two-year US$72bn flexible credit line (FCL). The FCL insures against possible volatility in global markets by supporting the country's balance of payments and international reserve position.

Source: Economist Intelligence Unit

Lesson in Mexico's Monetary Policy: Part 3

The central bank, Banco de Mexico (Banxico), is the autonomous authority on monetary policy. The central bank has the primary objective of maintaining stability in the purchasing power of the peso. The value of the peso is determined by the market, under a floating exchange-rate regime in place since the December 1994 peso devaluation. However, the central bank does intervene in foreign-exchange markets to maintain currency stability. The Exchange Rate Commission sets policy; it is made up of six members -- three each from the Ministry of Finance and Public Credit (Secretaria de Hacienda y Credito Publico -- SHCP) and the central bank, with the SHCP holding the deciding vote.

In January 2008 Banxico formally adopted an operating target for the overnight interbank rate (tasa de fondeo bancario) as a means to control peso liquidity in the market. The overnight interbank rate is set by the central bank's board of governors at its policy meetings. In 2009 Banxico engaged in a cycle of aggressive monetary easing to ease credit conditions and stimulate the slowing economy during the international financial crisis. The interbank rate was cut by 375 basis points in the first half of 2009, from 8.25% in January to 4.5% in July, where it remained as of end-March 2011. The Economist Intelligence Unit expects Banxico to maintain the interbank rate at this level throughout 2011.

Lesson in Mexico's Monetary Policy: Part 2

Mexico does not maintain foreign-exchange (forex) restrictions. Capital moves freely across the country's borders. Any forex policy changes require approval by the Exchange Rate Commission, composed of officials from the Ministry of Finance and Public Credit (Secretaria de Hacienda y Credito Publico -- SHCP) and Banco de Mexico.

Money-laundering regulations -- enacted since 1996 -- have improved scrutiny of large transactions. Rules require financial institutions (banks, credit unions, brokerage houses, exchange houses and "nonbank" banks) to report "suspicious" transactions to authorities within 20 working days. On a quarterly basis, financial institutions must also submit reports on transactions of monetary instruments with a value equal to or exceeding US$10,000. Nonetheless, money-laundering still remains a problem in Mexico, owing to lax enforcement and a lack of resources and co-ordination among the government bodies responsible for investigating and prosecuting money-laundering cases.

Source: Economist Intelligence Unit

Lesson in Mexico's Monetary Policy: Part 1

Banco de Mexico (the central bank -- Banxico) is the autonomous authority on monetary policy. The central bank has the primary objective of maintaining stability in the purchasing power of the peso. The value of the peso is determined by the market through a floating exchange-rate regime.

The central bank monitors price levels, and the economic variables that influence prices, in determining monetary policy. It also monitors the exchange rate, differences between observed and projected inflation, inflation expectations, revisions on collective employment contracts, producer prices, and the balances of the current and capital accounts.

Lesson in Financial Regulation in Mexico: Part 2

Continued from Lesson in Financial Regulation in Mexico: Part 1.

Since 2007, the government has been gradually easing restrictions on pension fund investments. In February 2010 pension funds were allowed to invest in private equity. Most recently, in March 2011 investment was allowed for the first time in select foreign currencies (US dollars, euros and Japanese yen only).

In March 2011 the Mexican stockmarket (Bolsa Valores Mexicana -- BMV) formed a derivatives order routing partnership with CME Group (the US-based entity created from the merger of the Chicago Mercantile Exchange and the Chicago Board Options Exchange in July 2007). The BMV's derivative products are offered through its subsidiary, the Mexican Derivatives Exchange (Mercado Mexicano de Derivados -- MexDer). The first part of the arrangement, launched in April 2011, granted Mexican investors direct access to CME Group's products through MexDer. The second part, expected to go live in the third quarter of 2011, will allow international investors direct access to MexDer derivatives through CME Group.

Source: Economist Intelligence Unit

Lesson in Financial Regulation in Mexico: Part 1

Financial regulation has been extensively reformed and improved in the past decade under the auspices of Banco de Mexico (Banxico -- the central bank), the Ministry of Finance and Public Credit (Secretaria de Hacienda y Credito Publico -- SHCP) and the National Banking and Securities Commission (Comision Nacional Bancaria y de Valores -- CNBV). Some of the more important steps in creating a solid regulatory framework have included the creation of a limited deposit-insurance fund; the introduction of new capital-adequacy and provisioning requirements; accounting standards that are revised regularly to match US practices; and the implementation of stricter lending practice requirements aimed at better assessment of the reserves needed to cover losses.
In 2010 Banxico focused on aiding Mexico's recovery from the global financial crisis, while also preventing the domestic economy from slipping back into recession. At the height of the crisis, Banxico engaged in a cycle of monetary easing and took a series of policy measures to ease credit conditions, stimulate the economy and counter pressure on the peso. The interbank rate was cut by 375 basis points in the first half of 2009, from 8.25% in January to 4.5% in July, where it remained as of end-March 2011.
In July 2010 Banxico published new norms regulating charges and fees financial institutions are permitted to impose on their clients (Banco de Mexico Circular 22/2010). The new rules prohibit credit-granting institutions from charging fees for services such as the opening and closing of on-demand savings accounts, and the cancelling of credit cards. Fees for overdrafts are only permitted if and when the institution's client has agreed to such a charge through a separate signed consent form. The reforms became effective at the start of 2011.

Wednesday, June 8, 2011

Air Liquide To Invest $100 Million USD in Mexico

From Chemical Week:

Air Liquide will invest about $100 million to build and operate an air separation unit (ASU) at Monclova, Mexico to supply industrial gases to steel maker Altos Hornos de Mexico (Monclova). The deal marks Air Liquide's entry into the Mexican market. The ASU is due to start up in the third quarter of 2012.
The ASU will be able to supply Altos Hornos with about 1,700 tons/day of oxygen. Additional oxygen, as well as argon and nitrogen, will be sold on the merchant market. "Our entry into Mexico provides a tremendous opportunity for us to establish presence in a strategic market region," says Michael Graff, president and CEO of American Air Liquide Holdings. "The country possesses a unique profile that combines an abundant supply of natural resources and increasing demand for products and services due to its anticipated commercial growth and its proximity to the U.S.," Air Liquide says.

Airline Industry Continues to Form in Mexico

Heroux-Devtek Inc (TSX:HRX), a Canadian manufacturer of aerospace and industrial products, announced in 2011 that it will build a new manufacturing facility in the Queretaro Aerospace Park in Mexico.
The project has received all required approvals from local authorities is expected to start production in early 2012.
The company, Heroux-Devtek, will invest up to 20 million CAD over the next three years to build a 47,200 square foot facility equipped with state-of-the-art machinery for producing aerostructure components. A future phase could see the plant expanded to 150,000 square feet, providing the company with the capability to manufacture and assemble aerostructure and landing gear systems.

A Brief Overview of Mexican Government

From the Economist Intelligence Unit, here are some basics about Mexican Government that every investor should know (maybe memorize too).

Elections: The Institutional Revolutionary Party (Partido Revolucionario Institucional -- PRI) ruled Mexico for 71 years until Vicente Fox Quesada of the National Action Party (Partido Accion Nacional -- PAN) won the July 2000 presidential election. Presidential elections were held on July 2nd 2006, and Felipe Calderon of the PAN won the race by a thin margin over Andres Manuel Lopez Obrador of the left-leaning Party of the Democratic Revolution (Partido de la Revolucion Democratica -- PRD). The next presidential election will be held in July 2012.

Government: Mexico has a presidential form of government, with the head of state elected every six years. Mr Calderon heads a minority government, following a poor showing in the July 2009 mid-term elections. The bicameral Congress is made up of a 500-member Chamber of Deputies (lower house) and a 128-member Senate. (Both bodies have members elected from individual districts and through proportional representation.)

Political parties: The main parties include National Action Party (Partido Accion Nacional -- PAN), Institutional Revolutionary Party (Partido Revolucionario Institucional -- PRI) and the Party of the Democratic Revolution (Partido de la Revolucion Democratica -- PRD). Others include Green Ecological Party of Mexico (Partido Verde Ecologista de Mexico -- PVEM), Workers Party (Partido del Trabajo -- PT) and Partido Nueva Alianza (Panal).

Fiscal year: January 1st-December 31st.

Mexico Investment Summit 2012

If you're interested in learning more about investing in Mexico, you can't miss The Mexico Investment Summit this January 2012 in Mexico City. The three day conference will be focusing on these areas of growth in the Mexican economy:

Pension investment
Private equity & venture captial
Real estate
Oil, gas & mining

Mexico is a regional leader and business influencer in Latin America and there's already great insight into why investing in Mexico is such a great opportunity:

"The Mexico Investment Summit focuses on a country that many consider to be the world's best combination of logistically based geography and phenomenal natural resources, a discussion important not only for its positive internal impacts, but for it's strategic effects on North American and world competitiveness."

Jeffrey M. Jones, Venture Partner, Alta Growth Capital, President, JMax Asociados SC

Find out more for yourself on the official Mexico Investment Summit 2012 website.

Mexican Makeover: The New Film Industry in Mexico

From Hollywood Reporter: Pablo Jose Barroso, a businessman turned producer, is literally making history with the Mexican period piece Cristiada. The movie features Andy Garcia, Eva Longoria, Peter O'Toole, Ruben Blades and Catalina Sandino Moreno.

The Hollywood Reporter states: "The film will not only go down in history as one of the costliest pictures ever produced in Mexico, but also as the first homegrown project to tap into a newly created audiovisual fund for large-scale productions. Spearheaded by state-run trade and investment agency ProMexico and film-financing body Imcine, the so-called ProAv program enables filmmakers to receive tax rebates of 7.5 percent on audiovisual projects that exceed 70 million pesos (about $6 million). The incentive comes at a time when the Mexican film sector is enjoying one of its most productive eras in decades, churning out roughly 70 features a year, thanks in part to strong government support like ProAv."

In Four Years, Mexico Has Received $90 Billion USD in FDI

The State News Service reported in early 2011 that during the 29th Plenary Meeting of the Mexico-Japan Business Committee, President Felipe Calderon, accompanied by Patricia Espinosa Cantellano, Secretary of Foreign Affairs, and Francisco Javier Mayorga Castaneda, Secretary of Agriculture, said: "During my four years as president, our country has received nearly 90 billion dollars in foreign direct investment. And this has happened precisely because Mexico has or represents a great opportunity of success for firms investing in our country. Indeed, this growth of investment has also enabled us to grow and create jobs."

President Calderon also stated that, "The Mexican economy offers wonderful conditions for investment," explaining that, "This is due to Mexico's enormous advantages, such as, for example, its strategic geographical position, particularly in a global economy such as the one we have today."

The point is, he said, "That we are working to make government an effective ally of investors."

Tuesday, June 7, 2011

Tourism Surge in Mexico Strengthens Mexican Meeting and Conventions Industry

In the latest ranking by the ICCA (International Congress and Conventions Association), Mexico has been ranked 22nd worldwide for international association meetings. There has been nearly a 31% increase in the number of meetings being held in Mexico, most probably due to the increment in visitor arrivals to Mexico. The Secretariat of Tourism (SECTUR) announced recently that Mexico was the main destination of U.S. citizens in 2010, capturing 14.7% of overseas tourism. This represents the highest number of U.S. travelers to Mexico since 2005, according to the U.S. Department of Commerce.

With figures like these, it comes to no surprise that during the first trimester of 2011, more than US $900 million were spent on tourism projects in Mexico, according to the Secretary of Tourism. The investments represent a 127 percent increase from 2010.

Get all the numbers here.

Mexico's Finance Minister: "Mexico Can Absorb All U.S., European Uncertainty"

At a press conference in Mexico City, Mexican Finance Minister Ernesto Cordero stated that Mexico's economy remains "very strong" despite signs of a slowdown in the United States.

"We've strengthened our internal market to be less dependent on what happens in the United States and we're showing good results, as new employment keeps being generated," Cordero said. "We are in large part in condition to absorb all uncertainty happening in the United States and Europe."

Labor Minister Javier Lozano said that Mexico should still reach the 600,000 new jobs forecasted for 2011, or even surpass it.

Click here to learn more about the growth of the Mexican economy in 2011.

Platinum, a Canadian Mold Maker, Expands into Mexico

Platinum Tool Technologies, based in Ontario, Canada, had financing pulled back by its banks back in July 2010 after having reached a high of 72 employees within 6 months of being formed.

From Plastic

Platinum Tool Technologies has survived a roller coaster 2010 and now finds itself halfway through 2011 not only recovering at its Canadian base, but also with a new and growing mold-servicing operation in Mexico that is bringing it new business.

“Our plan was to diversify into aerospace, but we were able to transfer over to other equipment to make our mold-making leaner and better, and get into Mexico,” President Dan Moynahan said in a June 1 telephone interview.

Get the whole story here.

DHS International Enters Canadian-Mexican Partnership

The Mexico Manufacturing Industry Information Center has reported that the Queretaro-based company DHS International has become DHS Group. In a partnership with DMS, a Canadian aeronautics company, DHS Group has the opportunity to distribute highly specialized tools and components to the aeronautics industry. DMS has over 30 years of experience in the aeronautics market. To read the full article, click here.

Mexico's Market Shows History of Resilience

Recently, predictions about Mexico's economic future are optimistic, no matter what the source. Research Magazine gives an in-depth overview of how the Mexican economy has bounced back from past economic crisis with amazing resilience and is now on its way to a beaming future.

Since joining the NAFTA trade agreement, "Mexico’s policymakers have sought to capitalize on their country’s proximity to the U.S. Consequently, Mexico has attracted investor interest for its uncommon identity as both emerging market and member of a vast trade bloc."

Although recent figures show U.S. public debt at almost 60 percent, growing concerns about U.S. public finances also increase Mexico’s attractiveness. See further into the issue.

Travel Weekly: "In Vegas, Calderon Bets on Tourism"

If you're interested in how the latest news about the state of affairs in Mexico is affecting tourism to Mexico, an important piece of the Mexican economy, read this article. It's an interview conducted by Arnie Weissman, a journalist for Travel Weekly, who got a chance to interview President Calderon on safety and security in Mexico.

Monday, June 6, 2011

Three Asian Car Assemblers to Bring Billions to Mexico

Good news for the Mexican region was announced last Friday: Bringing a US$2 billion investment with them, three Asian assemblers from China, Japan and India will be setting up shop in Mexico between 2011 and 2012.

Juan de Dios Barba, Chairman of the Mexican Employers Confederation, Confederacion Patronal de la Republica Mexicana (Coparmex), confirmed the news stating, “We know a Chinese automobile assembler will be established in Mexico; another may be Japanese and one more from India. Scouting groups came to analyze the possibility of installing plants that provide joint production for vehicles, with Chinese capital and Mexican manufacturing”, he said.

Mr. Barba would not disclose the name of the assemblers but he did describe the type of manufacturing processes that will be used and the consumers that will be targeted.

Mexican and American Governments in the Midst of Refinancing

From Benzinga:

In what could become a global trend, Mexico and the United States are both working to refinance their borrowing. The countries are attempting to increase the average length of their debt maturities, according to Bloomberg. Mexico's efforts to refinance its debt to longer-term rates may indicate a desire on Mexican policymakers to reduce exposure to risk.

The article on Benzinga's website says policy makers in the United States have taken a similar approach. Over the past two years, the average length of U.S. debt has risen from 4.1 years to 5.0 years.

Read more about it here.

Novelty Home Textiles' VP of Operations: "We Are Confident We Will Grow in Rosarito"

In an event headed by the Governor of the State of Baja California, Jose Guadalupe Osuna Millan, the company Industrias Kojo and its affiliated company, Novelty Home Textiles, announced the expansion of their plant in Rosarito, with a US$10 million investment and the creation of 607 new jobs.

Check out what was said at the opening ceremony in Rosarito, Mexico.

President Calderon: 'Invest in Mexico'

President Felipe Calderon received executive officers from Avaya Inc., a New Jersey-based company specializing in business communication services, applications and systems, to discuss some of the actions carried out by his Administration to attract productive investment.

In the meeting, President Calderon stressed the responsible management of public finances and an unprecedented amount of investment in infrastructure -- almost 5% of Gross Domestic Product (GDP).

Read more about why President Calderon says companies should invest in mexico.

Mexico Full of Opportunity for Real Estate Investors

Mexico is improving across the board, but the numbers show it's GDP growth is it's forte at the moment. Here are a few points from the article from the National Real Estate Investor:

The Economist Intelligence Unit (EIU) forecasts Mexico’s GDP growth rate to expand at an average annual rate of 3.7% from 2011 through 2015, higher than the 3.1% average achieved during the period 2003 through 2008, and 230 basis points higher than the average over the past 20 years. This higher growth rate reflects the stronger long-term prospects in Mexico.

The EIU also forecasts Mexico will experience a GDP growth rate of 4% and an inflation rate of 3.5% in 2011, and a similar trend of strong growth with moderate inflation through 2015.

This combination is attractive to investors, especially when compared with other Latin America countries, such as Brazil, that are contending with higher inflation rates and currency values.

Read the entire artcile for an in-depth look at real estate investing in Mexico.

In the Headlines: Forbe's 25 World's Biggest Companies

An investment buff, always in the corporate know, the go-to person for everything in finance?

Then you'll like the latest Forbe's ranking of the World's 25 Biggest Public Companies.

Check out who made it to the top of the list in 2011.

Saturday, June 4, 2011

Magnolia Bakery Plans to Open in Brazil, Japan, and Mexico


The Financial Times reported that Magnolia Bakery plans to expand into growing economies such as Brazil, Japan and Qatar in the next 18 months, eventually opening up shop in Mexico and other countries.

Friday, June 3, 2011

Mexico's Largest Phone Carrier to Face New Competition Rules


America Movil SAB, controlled by billionaire Carlos Slim, will face new rules as soon as this month that could force it to cut prices as Mexico’s dominant phone carrier.

The Federal Telecommunications Commission plans to apply restrictions to America Movil’s fixed-line unit around June 15. Next will be regulations for its mobile-phone unit, which could affect consumer prices.

To see what consequences this could have for the market, click here.

Arca Continental Stocks Jump

In Mexico City trading, Arca Continental surged 9.7 percent to 77.23 pesos this week, which qualifies as the biggest rise since the week ending Jan. 28, 2011. Its stock gained 2.9% today.

The Mexican bottling group had the greatest increase since January after Embotelladoras Arca SAB acquired Grupo Continental SAB, a bottler based in Tampico, Mexico and the two started trading as one company.


Mexico is Better Prepared for European Debt Crisis than Peers


Deputy Finance Minister Gerardo Rodriguez has reported that Mexico is actively protecting its economy from the European debt crisis by improving measures to help keep money in the country.

"We are a lot better prepared, especially relative to other countries, for a situation that could deteriorate externally,” said Rodriguez.

While countries from China to Brazil have raised their borrowing costs to combat inflation, Mexico is the only major Latin American country that hasn’t raised rates this year. Mexican annual inflation was at 3.3 percent in mid-May, near a five-year low of 3.04 percent reached in March.

For the full story, click here.

Mexico Catches Up to the U.S. -- About a Century Ago

Don't miss this interesting article with testimony of the U.S. Consul in Tampico, Mexico highlighting misconceptions about the country and how Mexico has made considerable progress in catching up to U.S. business standards. Click on the blue box to read the article and be sure to take a look at the surprising publication date at the bottom.

Rise in Mexican Consumer Confidence Index

(Reuters) - Mexico's consumer confidence index rose in May when adjusted for seasonal factors but remained well below pre-recession levels, underscoring persistent weakness in the economy.

The index climbed to 89.9 from a downwardly revised 89.2 a month earlier, the national statistics agency said on Friday. The reading was in line with a Reuters poll of analysts.

Before Mexico entered a recession in the second quarter of 2008, the index was running over 100.

Click here for the entire article.


Thursday, June 2, 2011

Mexico's Carstens Seeks Brazil's Support in IMF Bid

From Reuters:

Mexico's central bank chief, Agustin Carstens, arrived in Brazil on Wednesday aiming to win crucial support in Latin America for his bid to the lead the International Monetary Fund.

With Dominique Strauss-Kahn under house arrest in New York City, the race is between French Finance Minister Christine Lagarde and Governor Carstens. Watch Reuters Video.

In Depth View of Mexico in the Global Economy

In a recent interview with Bloomberg, famous contrarian economist, Dr. Marc Faber, reveiled little-known facts about the Mexican economy that can greatly influence investment decisions. For instance, on a per capita basis, the Mexican economy is larger than China's, India's and Brazil's. Read the full analysis on Ian Wyatt's blog, part of Seeking Alpha investment website, for a better understanding on Mexico in the global economy.

Bank of Mexico Sets Record Low Benchmark Interest Rate at 4.5%


Mexico is the only major Latin American economy that hasn’t raised interest rates this year.

The Governor of Mexico's central bank, Agustin Carstens, stated in an interview in Sao Paolo that “Mexico is in a good position right now.” He went on further to detail the factors behind Mexico's increasingly strong economy. “We have low inflation, strong public finances, relatively small debt to GDP, record high international reserves, exports are growing very fast,” he said.

Foreign Investment in Mexico Rises 10.5 Percent

According to the Associated Press, Mexico’s Economy Department reported that investment in the country totaled $4.79 billion in the first three months of 2011 -- up 10.5 percent from the same period in 2010.

The United States accounted for 85 percent of foreign direct investment in Mexico in 2010. Switzerland came in second at nearly 8 percent, followed by Canada and Spain at more than 2 percent each.

Mexico Predicted to Receive Up to $22 Billion in Direct Foreign Investment

Jose Zozaya, president of the American Chamber of Commerce in Mexico, said in a phone interview with Bloomberg that DFI could inject up to $22 Billion in Mexico in 2011 -- almost a 20% jump from the 18.7 billion garnered in 2010.

“We’re seeing a lot of interest from companies, including in the Far East, for locating factories in Mexico,” said Zozaya. “This shows that Mexico is very attractive for foreign investment.”

International Investors Buy $21 Billion in Mexican Debt

According to the San Francisco Chronicle, international investors bought $21 billion of Mexican debt denominated in pesos in the six months through March, the most since the central bank began compiling the data in the 1960s.

Moratorium on New Stores in Mexico City

According to a Wall Street Journal article published yesterday, Mexico City has placed a three-year ban on the opening of new stores in Mexico City, including grocers, convenience stores and hypermarkets. The Mayor of Mexico City, Marcelo Ebrard, proposed the measure,"We want the markets to survive, to continue to be the neighborhood centers."

The country's largest retailer is Wal-Mart de Mexico SAB, or Walmex, part of Wal-Mart Stores Inc. Although the moratorium has been enacted, stores with permits and construction under way shouldn't be affected. Walmex plans to invest an estimated $1.21 billion in Mexico with the opening 365 stores this year alone.

Look further into the issue here

Wednesday, June 1, 2011

Stability in Mexico: The Maquiladora Industry

The Mexico Manufacturing Industry Information Center published news today stating the stability of the maquiladora sector in Mexico. For those that have never heard the term 'maquiladora', Mexico's maquila program was established in 1965 and its primary aim was to encourage foreign corporations to build factories along the U.S.-Mexico border. A maquila program entitles foreign companies to foreign investment participation in the capital -- and management -- of up to 100% of the manufacturing facility without the need of special authorization. It also provides the company with special customs treatment, allowing a duty free import of machinery, equipment, parts and materials.

KPMG Consultants Firm, a U.S. audit, tax and advisory services firm, considers that bouts of delinquency and organized crime have not caused foreign capital to leave Mexico. Luis Ricardo Rodriguez, responsible for International Trade and Customs with KPMG, assured that this is thanks to the maturity of the maquiladora industry. “Maquiladoras are still very attractive at the border; Tamaulipas, Chihuahua, Baja California and Sonora are preferred”, he said. Mr. Rodriguez added that investments with a significant impact on economic activity have not been withdrawn from the northern border.

Mario Luis Cortes, Professor at the Universidad Panamericana, stated that Mexico remains a strong pole of attraction for both foreign and domestic investment.

Sources: MexConnect, The Mexico Manufacturing Industry Information Center

Mexico’s Sugar Output Reaches 5.1 Million Tons, as World’s 6th Largest Sugar Producer

According to Bloomberg, the Mexican sugar industry group, Union Nacional de Caneros, announced that Mexico’s sugar production reached 5.1 million metric tons for the current crop year ending this May 21.

Sugar is the largest crop in Mexico and is an important source of employment throughout rural Mexico. That's why companies like Imperial Sugar (Comercializadora Santos Imperial or CSI) have taken advantage of NAFTA regulations and have created new operations which will allow it to better serve two of the largest sweetener markets in the world – the United States and Mexico.

More on innovations in the sugar industry

Mexico's GDP Forecasted to Reach Up to 5% for This Year

In an interview with Bloomberg last week, the Governor of Mexico’s central bank, Agustin Carstens, stated that Mexico’s GPD is expected to be between 4%-5% for 2011. The forecast, released by the central bank this past May 11, replaces the previous GDP estimate of 3.8 percent to 4.8 percent growth in the region.

“Fiscal equilibrium, a good balance of payments, record international reserves and well-capitalized banking systems are providing a lot of economic certainty going forward,” said Carstens, adding that banks are becoming much more willing to lend, “supporting consumption, construction and housing."

On Monday of this week came additional good news for investors, when the peso rose 0.5% to 11.6896 per US dollar. In 2011, the peso has made gains of 5.6% against the dollar, making it “the best performer among the seven major Latin American currencies”, according to Bloomberg analysis.


Grupo Posadas SAB's Bonds Gain Value

Mexico's fastest economic growth in a decade has Grupo Posadas SAB’s bonds gaining value as the country’s largest hotel chain enjoys a surge in travel to Mexico.


Mexican Pension Funds Expected to Invest In Equity for First Time

According to BNAmericas, The International Finance Corporation (IFC) is expecting the first equity investment from Mexican pension funds - known as Afores - for a health public-private partnership (PPP) through a capital development certificate (CKD) to be the first of many to come. IFC senior investment officer Juan Luis Flores told BNamericas that, "This means that Afores' affiliates will benefit directly from these higher returns, while at the same time Mexico's infrastructure will grow and create more development."

CKDs are financial instruments created in 2007 to promote investment by institutional funds - mainly Afores, insurers and other investors - in local companies' capital or for the execution of productive projects in the country.

Mexico Inflation Forecasts Drop

According to Reuters, economists sharply lowered their predictions for Mexican inflation this year. The central bank carried out a survey in May that showed consumer prices were down 0.2% from a recent poll in April.

The lower inflation rate shown today could facilitate the central bank's role in helping the economy by leaving interest rates low.