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 Business News | July 2006 
Mexican Stocks Slip Amid Political Uncertainty
 Reuters
| | Felipe Calderon, presidential candidate for the National Action Party (PAN), bites his lip as he listens to a question during a press conference at his party headquarters in Mexico City July 11, 2006. (Reuters/Andrew Winning) |
Mexico City - Mexican stocks on Wednedsay fell for second straight day amid lingering concerns over political stability as leftists pressed their challenge to the wafer-thin victory of a conservative in the July 2 presidential election.
The IPC stock index fell 0.16 percent to 19,538 points while the peso was near flat at 10.9980 per dollar. Share prices fell 0.65 percent on Tuesday.
Andres Manuel Lopez Obrador, the former mayor of Mexico City, has asked an electoral court to reverse the narrow victory by conservative Felipe Calderon, of the ruling National Action Party, or PAN.
Calderon urged calm on Tuesday ahead of street protests led by Lopez Obrador.
Despite the uncertainty, foreign funds like Threadneedle Investments' Latin America stock fund remain optimistic on the Mexican economic outlook.
"After populist victories in Bolivia and concerns over increasing populism in other Latin American countries this year, Calderon's election has shown that Mexico is on a different development path than the rest of the region," said Threadneedle's Jules Mort.
In stock trading, cellphone operator America Movil rose 0.86 percent to 18.84 pesos and its New York-traded stock edged up 0.73 percent to $34.29.
But the company's gains were countered by a decline in cement maker Cemex, down 0.56 percent to 64.38 pesos. Its American Depositary Receipts fell 1.05 percent to $58.33.
Dominant retailer Wal-Mart de Mexico (Walmex) was down 0.18 percent to 32.98 pesos.
Walmex said on Monday net profit rose 33 percent in the quarter, beating expectations as the Easter holiday and World Cup soccer promotions fueled sales.
Bolsa Falls Due to Calderón´s Lack of Support in Congress
Wire services - El Universal
The nation´s stocks fell for a third day on concern that a Felipe Calderón administration would lack support in Congress to pass legislation opening the energy industry to private investment and keeping the budget balanced.
The Bolsa index fell 129.94, or 0.7 percent, to 19,570.21, led by Wal-Mart de México SA, Latin America´s largest retailer.
The Bolsa last week rose the most in three months after a second vote tally from the July 2 presidential election showed governing party candidate Calderón beating opposition contender Andrés Manuel López Obrador by 0.6 percentage point.
"Investors are reconsidering what Calderon will actually be able to accomplish after he takes office," Gerardo Lozoya, who helps manage US$200 million of equities at Investra Consultores, a Monterrey, Mexico-based brokerage. "If Calderón is unable to negotiate, this can hold back investors´ growth outlook, and we can certainly expect markets to be greatly affected."
The nation´s biggest corporate borrowers, such as América Móvil SA and Petroleos Mexicanos, the world´s third-largest oil producer, had fallen last month on concern López Obrador would win the elections and boost government spending.
"This new president is going to have a very divided Congress," Bank of America strategist Guillermo Estebañez said in an interview from San Francisco.
Corporación GEO SA, the nation´s No. 2 homebuilder, fell 1.18 pesos, or 2.9 percent, to 40.24 pesos. Housing stocks may fall until an official winner of the July 2 elections is declared, Cecilia del Castillo, an analyst at Citigroup Inc.´s Banamex unit said.
"A conservative government would promote the macroeconomic stability needed to benefit mortgage lending," del Castillo wrote. GEO shares rose 10 percent last week as a final vote tally showed Calderón ahead.
Homebuilder Urbi Desarrollos Urbanos SA fell 88 centavos, or 3.1 percent, to 28 pesos.
América Móvil SA, Latin Americas largest mobile phone company, fell 5 centavos, or 0.3 percent, to 18.68 pesos, dropping for the third day. The stock has increased 74 percent in the past year, compared with a 42 percent rise in the Bolsa index.
Wal-Mart de México SA, Latin America´s largest retailer, fell 87 centavos, or 2.6 percent, to 33.04 pesos. |
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