Basic Political Developments s21

Mexico

Basic Political Developments

· Mexico agreed to refinance $400 million in defaulted Cuban debt as the countries take steps to increase trade. The accord, reached yesterday in Havana by diplomats, comes after six years of decreasing financial ties between the countries.

· Mexico and Canada ratified their opposition to a US border wall Feb. 18 reports indicate.

National Economic Trends

· Assets held by Mexico's mutual funds increased by 18 percent last year to $80 billion, with portfolio managers buying slightly more corporate debt, although government paper still accounted for most assets.

· Mexico's stocks closed sharply higher on Monday, led by rises in cell phone operator America Movil, while the peso strengthened. The benchmark IPC stock index .MXX added 1.49 percent to 29,172.21 points in light trade as U.S. markets remained closed for the Presidents Day holiday.

Business, Energy or Environmental regulations or discussions

· Mexican phone company Telefonos de Mexico has shed about 750 workers as part of a corporate restructuring program as the firm prepares for more competition in its home market and the spin-off of its international operations.

· More than 90,000 counterfeits of 10 Swiss watch brands were seized in late January in Mexico City, in a raid involving the Federation of Swiss Watchmakers and Mexico’s federal authorities.

· Mexico's Femsa said on Feb 18 it sees strong sales in beer and at its convenience stores despite slowing U.S. and Mexican economies. Sales at Femsa's Oxxo, Latin America's top corner store chain, have been high so far this year and the company expects a similar performance to 2007's double-digit growth.

· Mexican retailers group ANTAD said on Monday its members' same-store sales edged up 0.8 percent in January compared with the same month a year ago. Same-store sales, a key performance gauge for stores that have been open for at least 12 months, rose by a stronger 1.6 percent in January 2007.

Activity in the Oil and Gas sector (including regulatory)

· Mexican President Felipe Calderon announced Feb. 18 the reactivation of the national petrochemicals industry by means of the construction of a new ethanol production plant. With this facility, Mexico will be able to lower its dependency on external markets for petroleum derivatives.

Terrorism and Social Instability)

· Mexican troops have seized 103 airplanes and three helicopters in hangars in Culiacan, capital of the northern Mexico state of Sinaloa.

· A total of three men were found killed in different areas of Michoacan in the last 24 hrs, according to police authorities.

· Mexico City police tightened security Feb. 18 after a bomb attack Feb. 15. The extra security includes more police helicopters flying over the capital and bomb squads patrolling busy areas.

Pemex

· Pemex reported Feb. 18 that it has controlled a leak of hydrocarbon in Tabasco state.

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Basic Political Developments

http://www.bloomberg.com/apps/news?pid=20601086&sid=arJ0Lf2y.EDk&refer=latin_america

Mexico to Refinance $400 Million Owed by Cuba, Bancomext Says

Feb. 18 (Bloomberg) -- Mexico agreed to refinance $400 million in defaulted Cuban debt as the countries take steps to increase trade.

The accord, reached yesterday in Havana by diplomats, comes after six years of decreasing financial ties between the countries, the Mexican Trade and Export Bank said yesterday in a release. State-owned Banco Nacional de Cuba and the island nation's central bank will be responsible for the debt, according to the statement. Terms weren't disclosed.

The money being refinanced will be used to fund Mexican exports to the Communist-ruled island. According to data from the Mexican bank, known as Bancomext, trade between the nations fell to about $200 million last year from an average $435 million a year during the 1990s.

Under acting President Raul Castro, Cuba's government has been renegotiating terms of its defaulted debt to attract new investment and blunt the effect of a 46-year U.S.-led economic embargo. Since Raul Castro replaced his ailing brother Fidel in July 2006, Cuba has restructured $166 million in defaulted loans with Russia and stretched out payments with Venezuela for billions of dollars in annual oil purchases.

Fidel Castro, who had ruled Cuba since ousting U.S.-backed President Fulgencio Batista in 1959, suspended payments on about $11 billion of debt during the late 1980s as financial aid from the Soviet Union began to phase out.

In May 2006, Bancomext recovered $35 million of defaulted Cuban debt after an Italian court ordered payments should be made to Mexico from a Cuban escrow account in Italy. Banco Nacional de Cuba had stopped debt payments to Mexico on behalf of Empresa de Telecomunicaciones de Cuba in 2002.

http://www.milenio.com/index.php/2008/02/18/195335/

Ratifica México y Canadá su oposición a muro fronterizo de EU

El diputado federal Gilberto Ojeda Camacho, reveló que los presidentes de los grupos parlamentarios, Santiago Creel Miranda, por México, y Peter Milliken, de Canadá, acordarán las condiciones en que se dará a conocer el posicionamiento de ambos países.

Mazatlán.- Las delegaciones de México y Canadá, que participan en la XV Reunión Interparlamentaria, ratificaron el manifiesto de ambos gobiernos en contra de la construcción del muro fronterizo por parte de Estados Unidos.

Al término de la mesa de trabajo que tocó el tema de la migración, el legislador mexicano consideró que el acuerdo es el más importante de la reunión, ya que ratifica el rechazo hacia la construcción de la barrera fronteriza.

En conferencia de prensa, Ojeda Camacho informó que los legisladores también exploraron los temas sobre la movilización laboral y los derechos humanos de los trabajadores migrantes en Canadá.

Resaltó que se analizó el respeto que se exige para los trabajadores mexicanos que están en Canadá “para que sigan siendo tratados con dignidad y sean vistos, no solamente como mano de obra barata y puedan aspirar a mayor capacitación”.

Indicó que en la mesa de trabajo se consideró como muy difícil que el Programa Temporal de Empleo en Canadá se extienda en el campo canadiense, debido a que en aquel país se implementan programas en los que se utiliza mayor número de maquinaria.

National Economic Trends

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN181978822008 Mexico's mutual funds expanded 18 pct last year

Mon Feb 18, 2008 4:37pm EST

MEXICO CITY, Feb 18 (Reuters) - Assets held by Mexico's mutual funds increased by 18 percent last year to $80 billion, with portfolio managers buying slightly more corporate debt, although government paper still accounted for most assets.

Fast-expanding mutual funds and pension funds have become become big players in Mexico's financial markets in recent years, providing steady demand for local investments.

At the end of December, Mexico-based mutual funds had upped their exposure to corporate debt slightly to 10.5 percent from 9.1 percent in the year-ago period, the National Banking and Securities Commission said in a report on Monday.

Government debt accounted for 60.2 percent of mutual funds' assets at the end of the year, down marginally from 60.60 percent the year before, the commission said.

Exposure to stocks was 10.8 percent, down slightly from 11.4 percent in January 2006.

The increasing role of pension and mutual funds, run mostly by big banks like Citigroup (C.N: Quote, Profile, Research) and BBVA (BBVA.MC: Quote, Profile, Research), in Mexico's financial sector makes markets slightly less dependent on massive foreign players, economists say.

That could add some stability to Mexican assets as foreign investors worry the U.S. economy could slide into a recession this year.

Pension and mutual funds, along with insurance companies, have accounted for most of the demand so far in Mexico's small but fast-growing mortgage-back debt market.

Assets of Mexico's private pension funds were worth about $78 billion at the end of January.

The commission did not say how much of the mutual funds' growth last year was fueled by appreciation of assets and how much was the result of increased flows from clients.

Mexican mutual funds have become more popular in recent years as mostly middle class and wealthy bank clients look for alternatives to savings accounts that pay little or no interest.

As of December, about 1.7 million mutual fund accounts were open on behalf of people and businesses, with an average balance of around $50,000.

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN1820150320080218?sp=true

Mexico stocks up on America Movil gains; peso firms

Mon Feb 18, 2008 4:37pm EST

MEXICO CITY, Feb 18 (Reuters) - Mexico's stocks closed sharply higher on Monday, led by rises in cell phone operator America Movil, while the peso strengthened.

The benchmark IPC stock index .MXX added 1.49 percent to 29,172.21 points in light trade as U.S. markets remained closed for the Presidents Day holiday.

Shares of America Movil (AMXL.MX: Quote, Profile, Research), Latin America's leading mobile telephone firm, climbed 1.72 percent to 33.08 pesos.

The peso MEX01 <MXN=>, which has been trading recently at three-month highs, strengthened 0.22 percent to 10.7345 per dollar after the central bank held interest rates steady at its monthly review on Friday, as expected.

Many economists see rate cuts later this year to protect the Mexican economy from a slowdown in the United States.

"We think the earliest the bank would cut the overnight rate is 16 May, 2008, inflation data permitting," Credit Suisse said in a report.

Mexico's benchmark 10-year government peso bond <MX10YT=RR> was up 0.069 of a point in price to bid 101.73, pushing its yield down 1 basis point to 7.50 percent.

Grupo Mexico (GMEXICOB.MX: Quote, Profile, Research), one of the world's largest copper miners, added 3.32 percent to 67.46 pesos.

Copper prices in London were buoyed on Monday by expectations of stronger demand from Chinese consumers, supply worries and falling stocks.

Mexican equities have sagged in recent months amid concerns that crises in the U.S. credit and real estate markets could lead to a U.S. recession. The IPC index is down just over 1 percent so far this year.

Mexico sends about 80 percent of its exports to customers in the United States.

Mexican companies that quote on the stock exchange are currently in their fourth-quarter financial reporting season, with drinks company Femsa (FMSAUBD.MX: Quote, Profile, Research) expected to report its results on Tuesday.

Broadcaster Televisa (TLVACPO.MX: Quote, Profile, Research) is seen announcing a 7 percent rise in quarterly net profit on Thursday, driven by its cable satellite and television units.

http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSN1820574820080218

UPDATE 1-Mexico retailers Jan same-store sales up 0.8 pct

MEXICO CITY, Feb 18 (Reuters) - Mexican retailers group ANTAD said on Monday its members' same-store sales edged up 0.8 percent in January compared with the same month a year ago.

Same-store sales, a key performance gauge for stores that have been open for at least 12 months, rose by a stronger 1.6 percent in January 2007.

Supermarkets, restaurants and department stores had a rough ride in 2007, hurt by declining remittances from Mexicans living in the United States and by a cooling local economy.

The National Association of Retailers, or ANTAD, has Wal-Mart de Mexico (WALMEXV.MX: Quote, Profile, Research), Soriana (SORIANAB.MX: Quote, Profile, Research) and Comercial Mexicana (COMEUBC.MX: Quote, Profile, Research) among its key members.

ANTAD Chairman Jose Manuel Sanchez said in January he saw same-store sales rising 1 percent this year, the same as in 2007. (Reporting by Gabriela Lopez; Editing by Andrea Ricci)

Business, Energy or Environmental regulations or discussions

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN1820150320080218

Mexico's Femsa sees strong sales despite slowdown

MONTERREY, Mexico, Feb 18 (Reuters) - Mexico's Femsa (FMSAUBD.MX: Quote, Profile, Research) (FMX.N: Quote, Profile, Research), the largest Coke bottler and brewer in Latin America, said on Monday it sees strong sales in beer and at its convenience stores despite slowing U.S. and Mexican economies.

Sales at Femsa's Oxxo, Latin America's top corner store chain, have been high so far this year and the company expects a similar performance to 2007's double-digit growth, Chief Executive Jose Antonio Fernandez told Reuters at an event in Monterrey, where the company is based.

"We have had very good sales in the first two months of the year and we expect Oxxo's sales to be the same as last year, easily outpacing the country's economic growth," he said.

Fernandez said sales of its beers such as Sol, Bohemia, Tecate Light and Dos Equis in both Mexico and the United States also remained strong and growth of low alcohol beer Sol Zero and other new products were above expectations in Mexico.

Femsa aims to export Sol Zero, the dark Bohemia Oscura beer and its fruit-flavored Soul Citric drink to the United States next year. "Those three products are generating surprising additional sales," he said.

Fernandez said he saw solid 2007 results, which are due to be published on Tuesday, and had no plans to revise Fema's 2008 outlook as Mexico's economy slows to a forecast 2.8 percent growth level this year from an earlier government prediction of 3.7 percent.

The Mexican economy grew about 3.2 percent last year and growth is expected to weaken further due to a housing and credit crisis in the United States, Mexico's top trading partner.

"We won't change (our earnings) data because of the global outlook ... not in any way. We will spend our budget as we agreed in October and November because I insist, if you start changing things downward, it becomes a self-fulfilling prophesy," he said.

A Reuters survey of five analysts forecast, on average, that Femsa's October-December net profit will expand 28 percent to 2.157 billion pesos ($198 million), from 1.687 billion pesos a year earlier.

Fernandez said the integration of its new unit, juice maker Jugos del Valle -- bought by a joint venture between Coca-Cola Co (KO.N: Quote, Profile, Research) and Femsa's Coke bottler Coca-Cola Femsa (KOF) (KOFL.MX: Quote, Profile, Research)(KOF.N: Quote, Profile, Research) last November -- was moving ahead smoothly.

Coca-Cola and KOF have already invited other Coke bottlers in Mexico and Brazil to join the business but declined to say how much the participants had paid to join the new company.

"All the parties are now working within the venture," he told reporters.

http://www.cellular-news.com/story/29404.php

Mexico's Telmex Trims 750 Workers Under Restructuring Plan