Mexico won’t grow or get healthier on taxes alone 4 Nov 2013 New tariffs - including on high-calorie foods - are a mixed bag, and likely to cause economic drag. Mexico’s tax yield is low globally but that looks like poor enforcement not low rates. Diverting more resources into inefficient government is a poor recipe for faster growth.
Mexico finally getting full benefit from NAFTA 21 Oct 2013 Investment in Mexican auto plants is surging, as is its share of the North American car market. Like Eastern Europe, the country is becoming a nexus of manufacturing for its richer neighbors’ markets. This, together with policy reforms, makes Mexico Latam’s brightest prospect.
Carlos Slim dented, not defeated, in KPN tussle 16 Oct 2013 Facing a poison pill, the tycoon dropped a buyout bid for the Dutch telco. Slim has been clumsy, and his 30 pct stake in KPN has lost money. But this is a tactical retreat showing financial discipline. He can return later. For now this usefully frees up funds to spend elsewhere.
Mexico’s new tax hikes may endanger the economy 9 Sep 2013 Increasing government revenues from their current low level makes sense, as do parts of the country’s new budget, like capital gains taxes. But a carbon levy will raise the heavy burdens on Pemex, and tax-and-spend fiscal drag may further weaken sub-par Mexican growth.
Slim’s support makes own bid for KPN look cheap 26 Aug 2013 The Mexican tycoon is backing the Dutch telco’s disposal of its German business to Telefonica Deutschland. But the new price raises KPN’s standalone value, making the smallish premium in Slim’s offer for the parent seem miserly. KPN needs to squeeze more out of its lead investor.
Mexico’s GDP slowdown clashes with reform program 21 Aug 2013 Output shrank by 0.7 pct in Q2 and the economy has grown only 1.5 pct since mid-2012, barely outstripping population gains. That could make reforms like opening oil giant Pemex to foreign investment politically even tougher – despite the fact they would ultimately boost growth.
Mexico rips a good page from China’s oil playbook 19 Aug 2013 The boss of state-run Pemex wants to drill in shale rock and deep seas north of the border for the first time amid wide-ranging energy reforms. As with China, the investment is apt to yield more technological know-how than reserves. Mexico’s dreadful output at home needs the help.
Diluted oil law puts Mexico president on back foot 13 Aug 2013 Enrique Peña Nieto won office promising widespread reform to boost the economy. But he’s watered down plans to end the state oil monopoly to placate nationalists. That’s bad for foreign oil companies needed to jumpstart production – and shows rivals may weaken his broader agenda.
Opening oil sector could spur other Mexico reforms 25 Jul 2013 The nation’s ban on foreign investment in crude is almost a sacred cow. Overturning it might boost output while creating momentum for fundamental change in the telecom and power industries as well. That could lead to faster economic growth and attract big money from abroad.
Carlos Slim needs more than pique to stop KPN 24 Jul 2013 The biggest investor in the Dutch telco has failed to bless its $11 bln German selloff. That’s awkward. Whether strategic or financial, the depth of the Mexican mogul’s misgivings is unclear. Still, blocking the sale would be hard unless Slim can offer a sound alternative deal.
Mexico’s infrastructure blitz needs another flank 17 Jul 2013 President Peña Nieto expects some $300 bln of public and private funds to be spent on roads, broadband and the like through 2018. Such sums, however, could easily exacerbate corruption, deficits and waste. To get bang for the buck will require big investments in law and order.
Mexico leader’s Pemex reform doesn’t quite hit it 18 Jun 2013 President Enrique Peña Nieto wants to end the state-owned firm’s oil exploration monopoly. But his overhaul still limits foreign access, a nod to nationalist concerns. That could impede increasing Mexico’s slipping oil output – a core part of Peña Nieto’s reformist agenda.
NAFTA veteran is trade-friendly choice to run WTO 6 May 2013 The two men vying to replace Pascal Lamy are both Latin American. But Roberto Azevedo has spent 15 years fighting Brazil’s protectionist corner, while Mexican Herminio Blanco negotiated NAFTA and has 13 years of private sector experience. He looks the likelier free-trader.
Flawed Mexican banking revamp deserves a shot 25 Apr 2013 The delayed reforms include a universal credit registry and easier foreclosure, both big improvements to the system that could boost consumer borrowing and spending. But they also allow the regulator to force banks to lend. That leaves the risk of a Brazil-style hangover.
Mexican reforms threaten to rouse slumbering giant 13 Mar 2013 Attempts to weaken Carlos Slim’s telecom holdings follow new oil and education plans. Such moves would rattle the stasis that has restrained growth in the $1.2 trln economy for decades. If political inertia can truly be overcome, market disciplines could propel Mexico.
Mexican manufacturing puts China, Brazil in shade 26 Feb 2013 Exports and other data point to steady gains in competitiveness over the last decade. Mexico’s wage costs are up only 20 pct in dollar terms - a fraction of the increase in the PRC and other big emerging markets. With Europe in recession, global market share is up for grabs.
Carlos Slim takes least-worst option at KPN 20 Feb 2013 The Mexican mogul has belatedly agreed to help the Dutch telco raise 4 bln euros of capital. Slim’s near-28 pct stake is way out of the money. But the alternatives to raising the losing bet were even uglier: a quixotic full bid; heavy dilution; or leaving KPN over-levered.
AB InBev moves fast to keep Mexico prize 14 Feb 2013 The world’s top brewer has quickly rejigged the $20 bln takeover of Grupo Modelo. If U.S. regulators now approve, the deal still makes sense for AB InBev, both financially and strategically. It will get bigger in Mexico and can still try to make Corona beer a global smash.
AB InBev setback may hasten last round of beer M&A 1 Feb 2013 U.S. government opposition to AB InBev’s $20 bln buyout of Grupo Modelo may speed up a last bout of sector consolidation. The world’s biggest brewer may yet find a workable compromise with trustbusters. But an obvious plan B is pouncing on emerging-markets focused SABMiller.
Latam can rely on masses for next phase of growth 31 Dec 2012 A few key people like the world’s richest man and showy political leaders have epitomized the region for years by spearheading the commodity-led, export economies. In 2013, a burgeoning middle class, helped by low interest rates, will make a mark powering Latin America’s future.