Category: Regions

In a victory for Mexican President Vicente Fox, Mexico’s Supreme Court ruled the president had the right to allow private companies to generate electricity in the country. The lower house of Congress had asserted that only the government had the right to generate electricity and was seeking to annul all concessions awarded to private companies. The ruling comes as Fox steps up calls for Congress to open the economy to private investment in energy.

Mexico’s state oil company Pemex auctioned a round of short-term bonds worth $44 million on the Mexico City stock exchange last week. The 28-day fixed-rate bonds pay a 9.78 percent fixed annual interest rate. Credit ratings agency Standard and Poor’s assigned its mxA-1+ rating to the issue, Fitch its F1+ (mex) rating and Moody’s its MX-1 rating.

Mexico’s dominant fixed-line telecom company Telmex, owned by Carlos Slim, has agreed to sell its shares in MCI to Verzion Communications. Telmex has 8.1% of the company. The agreement was reached after more than two months of negotiations between MCI, Qwest Communications and Verizon.

Mexico’s lower house of congress voted 360 to 127 to remove Mexico City Mayor Andrés Manuel López Obrador from office to face charges of disobeying a court order, which could derail his 2006 presidential bid. López Obrador called on his supporters to peacefully resist what he called an unjust, politically motivated attempt to derail his presidential campaign. He specifically accused President Vicente Fox of conspiring to block his candidacy. Yields on Mexico’s ten-year dollar bonds have widened out by 100 basis points since hitting a record low on February 10th.

Mexican consumer prices rose 0.45% in March as higher international oil prices pushed up prices for gasoline, natural gas and jet fuel. The Central Bank also said prices for agricultural goods are rising. However, the core inflation rate, which excludes volatile energy and food prices, fell to 0.31% last month from 0.42% in February.