DECEMBER 2005 EDITION ARCHIVE
Business & Politics Outlook
Political Parties’ Alliances become Final for the Presidential Race
Recently, the Convergence for Democracy Party and the Labor Party (PT) formed an alliance with the Democratic Revolution Party (PRD) to jointly support Andrés Manuel López Obrador as their common candidate for the Presidency. Additionally, the Mexico Green Ecologist Party (PVEM) joined the Institutional Revolutionary Party (PRI) to jointly support common candidates, including Roberto Madrazo Pintado as presidential candidate.Standard & Poor Affirms that There Will be no Financial Risk if Andrés Manuel López Obrador Wins the Presidency in 2006
The rating agency, Standard & Poor, has stated that the Mexican left is “pragmatic” and will not institute policies similar to those of Venezuelan President Hugo Chavez, if López Obrador wins the Mexican Presidency in 2006. Various financial market representatives, as well as Mexican and foreign investors, affirmed that they are confident there will be no economic risks or radical changes if the PRD’s candidate wins.José Angel Gurría, Former Treasurer during Ernesto Zedillo’s Administration, is now President of the OECD
José Angel Gurría, one of the most important designers of the economic policies of former President Zedillo, has been elected President of the Organization for Economic Cooperation and Development (OECD). Gurria’s candidacy was supported by the government of President Fox, which viewed the election positively and stated that: “it will strengthen Mexico’s foreign relations, and the role of Mexicans abroad, by being properly represented by a worthy Mexican.”Amendments to the Federal Telecommunications Law Grant Greater Powers to COFETEL but Generate Controversy
The Federal Telecommunications Commission (COFETEL) will be in charge of regulating and granting radio and television concessions. However, the reforms establish the possibility for current licensees to obtain new frequencies or channels at low prices, which implies an unfair trade practice according to some industry experts. The Senate has stated that it will analyze such amendments in a “serious and responsible manner” due to the criticism raised by analysts.Stock Market Bill is Approved by the House of Representatives
The Mexican financial sector has positively viewed the approval of the Bill for the new Stock Market Law which was proposed by the Mexican Stock Exchange. The new law proposes regulation based on international standards for the companies that offer their shares on the stock market. The regulation includes principles such as dissemination of information to the investing public, minority rights, good corporate governance and the creation of an audit committee with independent directors. Many... [Read More]The Department of Finance Reports a Public Finance Surplus from January through October
Public finances generated a surplus of 104,890,000,000 pesos, which is 43.5% above the amount registered for the same period last year. Such was principally motivated by the high oil high prices. The Department of Finance also reported that so far for 2005, budgeted income shows a real annual increase of 10.9% over the 2005 budget estimates.CINTRA, the Government Holding Company for the Two Largest Mexican Airlines, Announced the Sale of “Mexicana” to Grupo Posadas
Last week, CINTRA announced that Grupo Posadas, one of the largest Mexican hotel consortiums, placed the highest offer for the purchase of Mexicana de Aviación, whereby Grupo Posadas will pay CINTRA 165.5 million dollars and assume all the company’s liabilities, such as plane leases, pending debt and labor debt.Mexican External Debt Improves its Rating
The rating agency, Fitch, upgraded its rating of the Mexican debt from BBB- to BBB, with a stable perspective, affirming that the country will maintain macroeconomic stability notwithstanding next year’s presidential election results.Economic Indicators
Dollar Quote
The Mexican peso continues to gain value against the U.S. Dollar. The current exchange rate is 10.58 pesos per dollar, compared to 10.71 in November.Mexican Stock Market
The Mexican Stock Market (BMV) closed on December 7 at 17,244.19 points.Interest Rates
Mexican Interbank Equilibrium Rates (TIEE) for 28 day terms are currently at 8.90%.