Mexico is the “most attractive” emerging market in the world after China


Every year large amounts of money are injected by investors into emerging markets, which offer greater profitability, through the purchase of bonds, stocks and other financial assets.

Within this framework is Mexico, which is in the group of emerging nations that are more attractive to foreign investors, according to the Institute of International Finance (IIF, for its acronym in English).

The interest in these markets, which benefited Mexico, arose as a result of the Federal Reserve of the United States gave signals that the interest rate will no longer rise. Simply put: as EE. UU Pay less, customers moved to where they pay more.

Mexico, the great beneficiary of the world situation

Months ago there was uncertainty about the economic policy of the new president, Andrés Manuel López Obrador, however the situation has changed.

“The levels of uncertainty about Mexico have started to dissipate,” says Robin Brooks, chief economist at the IIF.

In fact, there seems to be confidence on the part of investors in the AMLO government.

“Mexico offers a very good interest rate and generates credibility,” says analyst José Yuste.

Recall that the 8.25 percent reference rate set by the Bank of Mexico is very convenient for those who have funds to invest; a more favorable situation than the US Treasury Bonds. UU with a ten-year maturity of 2.6 percent.

The Pemex case

In spite of this, there are doubts among the big investors about the energy policy and the situation of the state oil company Pemex, with a debt exceeding 95 billion dollars. However, for investors the condition of the parastatal does not seem to be an important factor.

“The problems of Pemex are nothing new and are not a surprise for many investors,” says Edward Glossop, emerging markets economist at the British consultancy Capital Economics.

However, the good run for Mexico could come to an end, due to “a scenario of greater uncertainty for businesses and investors,” says Aaron Gifford, an analyst at the US company that manages global assets T. Rowe Price Group.

Gifford says that López Obrador “has sent contradictory messages,” due to his “nationalist stance” in the energy sector, the cancellation of the new international airport and the creation of “poorly designed” social and infrastructure programs, according to the expert.

Source: BBC, Noticieros Televisa, Mexico.News

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