Category: Regions

US railroad giant Kansas City Southern traded a $1.2 billion tax refund for the Mexican government’s remaining 20% stake in its TFM rail company. The deal gives Kansas City full ownership of the 6,000-mile railroad linking Mexico with markets in the US.

Mexican Energy Minister Fernando Elizondo denied the country plans to privatize the oil and gas industry. He said President Vicente Fox’s plan to open the sector up to private investment is not to be seen as a move towards privatization.

Investors are continuing to put their money on Peru as the country’s dollar-denominated bonds outperform other emerging market debt including that of Mexico. Peru’s bonds returned 9.5% to September versus 7.5% on comparable Mexican and other emerging market sovereign bonds. Low inflation, two years of growth and buoyant exports have convinced investors to back Peru. Meanwhile, a recent poll has shown that President Alejandro Toledo has recovered some points in his public approval rating for the first time since the political crisis last month.

President Hu Jintao of China, currently on a three-day visit to Mexico which began on Sunday, has said that Mexico is an important partner for China in Latin America. The partnership is, however, seen by many to be mainly in China’s favour with Mexico running a $13.5 billion trade deficit with its partner last year. Both countries export similar products and compete strongly in the textiles, electrical and electronic sectors, particularly with regard to market share of the US.

Mexico’s central bank says inflation last month was 0.12%, slightly below analysts’ forecasts of 0.18%. Inflation on an annualized basis is now running at 3.95%. This is the first time since 2003 that inflation has been within government targets of between 2% and 4%.

Mexican stocks jumped 1.43 percent to a record high close of 15,246 Wednesday, helped by telecom companies, retailer Walmex and a rally in home builder Sare ahead of a share offer. Investors have snatched up Mexican stocks this week amid expectations that US interest rates may rise slower than expected following the disaster wrought by Hurricane Katrina.

Wal-Mart de Mexico, Latin America’s largest retailer, is considering 371 cities as locations for new stores, said Chief Executive Eduardo Solorzano. The company plans to open 90 stores by yearend, including 12 Wal-Mart Supercenters, as it shifts its growth strategy from large urban centers to small cities in Mexico.