In Y 2001 a paper focused investors’ attention on the BRICS; Brazil, Russia, India and China, South Africa-those countries’ stock markets, averaged out, have risen about 400%.
Mexico’s exchange has risen more than 650%, and in a time of capital out flows from emerging markets draining dry on expectations of the US Fed tightening policy Mexico looks very solid by comparison.
Mexico is engendering that confidence with both policy reforms and the country’s inherent strategic advantages.
It is easy to forget just how sizable the economy is, it is 14th in the world, ahead of South Korea, it has balanced government budget, a steadily growing population, a dramatically reduced deficit and relatively high interest rates.
People who turn away based on media accounts of drug cartel wars are missing out.
Mexico is affirming the confidence of the foreign investor by liberalizing over protected markets, including Crued Oil and Nat Gas.
The initiative to loosen state-owned Pemex’s total control of petroleum resources is a cornerstone of President Enrique Nieto’s agenda. But just what form a liberalized energy market-opposed by many who see Crude Oil as a national Treasure remains to be seen.
The prospect of an open energy market offers great opportunities, but all sectors deserve a look.
We cannot overstate the benefits Mexico enjoys through NAFTA and by being next door to the US, the country appears to be growing only more attractive.
Mexicao has increasingly stable economy and a growing middle-class, that make Mexico very attractive. Mexico’s economy is expected to pick up steam next year to grow at about 4%, according to the finance ministry.
“Direct investment is what every emerging market wants, more than the hot money that rushes in and all heads for the door at the same time,” said Sizemore of Covestor.
Global investors are keeping an eye out for “predictable, reliable, secure domestic institutions. Mexico’s increasing success in building them may there is not the intensity of capital outflows from there.