Intelligent Investing: Can Mexico Grow Like China?

Check out this video that debates whether Mexico will be able to expand like China and what reforms are necessary for that to happen. Very interesting video.

Feel free to leave your comments below!

Spain's BBVA to Invest $2 Billion in Mexico

Via Latin American Herald Tribune:

Spanish banking giant BBVA, the second largest bank conglomerate in Spain, and 7th in the world, will invest $2 billion in its Mexican unit, BBVA Bancomer, over the next three years, BBVA chairman and CEO Francisco Gonzalez said in June.

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This plan entails strong investment in technology and new platforms, and it is also an indication of BBVA Bancomer’s commitment to banking and the promotion of lending,” Gonzalez said in an address that was attended by Mexican President Felipe Calderon.

With the ever-growing Mexican economy, the BBVA investment funds will be used to expand branches, add ATMs and payment terminals, and promote mobile banking, Gonzalez said.

How do you think this will affect the Mexican banking sector and the Mexican economy as a whole?
I'd be interested to read your comments below.

Mexico and Turkey Sign Air Transportation Agreement

According to Turkey’s Civil Aviation regulator, Turkey and Mexico recently signed an agreement to begin flights between the two countries. With the signing of this air transportation agreement, passenger and cargo flights between Mexico and Turkey will be allowed to connect through Portugal’s Lisbon and Porto airports. Read more on this great change in the international aviation industry here.

Mexico Central Bank Keeps Benchmark Rate Unchanged

The “pace of economic activity appears to have slowed,” while domestic demand has lost some dynamism, the central bank said in the monetary decision statement. “We don’t expect generalized price pressures in the economy,” the bank said.

Banxico, as Mexico’s central bank is known, is saying “the traditional list of domestic risks to inflation is practically clean. The risks could come from international volatility,” Luna said in a telephone interview from Mexico City.

Industrial production grew 1.4 percent in April from a year earlier -- the slowest expansion since the 0.6 percent increase posted in December 2009 -- from 4.4 percent in March, the nation’s statistics agency reported June 13.

Read the full article here.

Mexico: Inside A Top-of-the-Line Saddle Business

Talabarteria Rancho Grande is located in Sonora, Mexico. It's a world-class saddle maker, and is the preferred saddle for expert riders, as well as anyone who has a great appreciation for horse-back riding or an equestrian flair.

The business stands out from the rest because it has essentially turned saddle-making into an art. The store, started by Luis Molina in 1949 and now run by his son David, specializes in high-end, elaborate saddles that last up to 30 or 40 years.

Click here to read more about this inspiring Mexican business.

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'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.