Latam’s bad oil policies laid bare across an ocean 13 Aug 2012 Despite some tough regimes and far smaller reserves, Africa is set to overtake Latin America’s crude output this year. The unlikely reversal reflects investor-friendly approaches in the likes of Angola. It’s also the clearest sign yet of how misguided the Latin region’s course is.
Mexico’s violence-hardened consumer looks safe bet 9 Jul 2012 Despite all the narcotics-related killings, Mexicans are confident, enjoy higher employment levels and have room to borrow more. Though stock market valuations reflect this apparent conundrum, more profit still may come from consumers south of the U.S. border.
Mexico’s election provides chance to break taboos 29 Jun 2012 The party that ran the country for 71 years is set to regain the presidency. Enrique Peña Nieto has a historic opportunity to bend the PRI’s power-broking machinery toward long-resisted reforms like freeing up the energy sector. If he doesn’t, stagnation - or worse - may loom.
Carlos Brito pays through the nose for Modelo 29 Jun 2012 The Bud boss is drawing a cool $20 bln from the keg to acquire the half of the Mexican brewer he doesn’t already own. To make that work Brito is going to need to brew up more than the $600 mln of synergies he is promising. History suggests that is possible - but it’s a stretch.
AB InBev can pay top dollar to gulp down Modelo 25 Jun 2012 The brewing giant is considering buying the rest of the Mexican beer maker it doesn’t own. That would give it another leg up over regional rival Heineken and let CEO Carlos Brito cut costs. Just matching Modelo’s operating margin to its own would justify a $15 bln price tag.
Pemex can’t shake stigma of state-run cheapskate 20 Jun 2012 The Mexican oil company just held a second disappointing wells auction. But investors lapped up its $1.75 bln sale of 32-year debt. The contrast shows that potential partners still have little faith that Pemex can be more than a cash cow for creditors and its government owner.
Carlos Slim may drive KPN to poison 1 Jun 2012 The Dutch telecoms group is scrambling to dodge what it sees as a takeover-on-the-cheap from the world’s richest man. It seems to want to do a deal in Germany that’s been talked about for years. But counterpart Telefonica isn’t ready to trade. KPN might resort to poisoned pills.
Wal-Mart shareholders can make their protest count 25 May 2012 With half the votes sewn-up by the Walton family, directors tainted by the retailer’s Mexican bribery scandal look safe in their seats. But investors disturbed by Wal-Mart’s cover-up should make their displeasure known just the same by targeting Chairman Robson Walton himself.
Carlos Slim pays up for foothold in Europe 8 May 2012 The Mexican tycoon wants to boost his stake in KPN to 28 pct and offers a 23.5 percent premium in a $3 bln-plus deal. Investors in the ailing Dutch telecoms operator haven’t had such good news in a while. But Slim’s move is hard to read: KPN stock is cheap for good reasons.
Earnings surge only superficial relief for Pemex 3 May 2012 A 20-fold jump in Q1 paper profit obscures the fact that little has changed at Mexico’s oil monopoly. Production continues to slide and its profit potential is crushed by the government’s tax take. Only election season talk of oil industry openness offers a glimmer of hope.
Be wary of Santander’s Mexican fiesta 25 Apr 2012 The Spanish lender hopes to boost capital by listing its Mexican unit, which should fetch a higher valuation than the parent. Santander did the same in Brazil in 2009. But given the bank’s knack for selling at the peak, investors will have to be convinced there is some value left.
Walmex bribery woes may offer investors a bargain 24 Apr 2012 Wal-Mart’s Mexican unit saw more than $7 bln of market value vanish on allegations that its former boss authorized $24 mln of bribes. This looks like an over-reaction. Not only do Mexican authorities have bigger fish to fry, Walmex has no need to grease palms to keep growing.
Deep-sea oil prize may spark Mexican energy reform 16 Feb 2012 Creaky state monopoly Pemex is taking on the trickiest drilling task of all - ultra-deepwater wells. After BP’s Macondo blunder, regulators are justly scared it’s not up to the job. With over half of Mexico’s oil offshore, this prize may spur the government to shake Pemex up.
Mexico looks out of step with world on antitrust 6 Feb 2012 As Europe and the United States block deals that threaten competition, Mexico last week gave Carlos Slim a free pass by stopping two TV barons uniting to challenge his telecoms dominance. The country’s feeble and captured competition authorities are squelching free markets.
Post-slump, Cemex expansion looks damaging 1 Feb 2012 The Mexican cement giant grew mightily, but economies of scale top out quickly and transportation costs are high. The forecast loss for the latest quarter is modest, but if big losses outside Mexico continue the company’s $8.1 bln of debt maturing in 2014 will pose a big problem.
Political star puts Mexican oil reform in reach 19 Oct 2011 Mexico’s presidential frontrunner Peña Nieto wants “audacious” changes to revive the nation’s ailing state-run energy giant. Ebbing output makes an overhaul crucial. Others have made similar promises, but with Mexico’s political tide slowly changing, Peña Nieto might just succeed.
Mexico needs to open door to its oil wider 19 Aug 2011 Bringing foreign firms into a few wells is a positive, if overdue, development. But more radical action is needed if the country is to make the most of its reserves. Only juicier deals for outsiders and better management of its state monopoly Pemex will revive ailing output.
Slim pickings for Slim in $6.5 bln Telmex tender 2 Aug 2011 The Mexican mogul’s America Movil is buying out the remainder of the country’s shrinking fixed-line carrier at a premium valuation relative to its own. That looks like a bad exchange. Without a solid explanation, it’s easy to see why investors sliced $4 bln off Movil’s value.
Pemex scandal highlights need for restructuring 1 Aug 2011 Long treated as a cash machine by the Mexican government, the national oil group also now appears to have been milked by criminal gangs to the tune of $600 mln just last year. Though imperfect, Latin rivals like Petrobras and Ecopetrol offer models Mexico should emulate.