Stick with Mexican stocks

Mexico still has plenty of problems, but the country is moving in the right direction.

Mexico's president Enrique Pea Nieto has won worldwide praise for reforms designed to boost the economy's growth potential. But he's unpopular at home, where the "interlinked problems of violent crime and corruption" are the main concerns, saysThe Economist.

You can see why. Drug traffickers killed 43 students in the southern state of Guerrero, after police kidnapped them and handed them over.

And it seems that one of the firms in a consortium hoping to build a high-speed rail line owns a mansion that is the Pea family's private residence.

These events are a reminder that economic reform won't be enough if criminality and corruption continue to undermine growth.

Pea needs to "pursue reform of Mexico's police forces with the vigour, commitment and ingenuity he has brought to opening its energy and telecommunications markets", says Bloombergview.com. It won't be easy, but Mexico has come a long way recently and this should be merely a setback, says Dimitra DeFotis in Barron's.

Remember that the government "shattered a 75-year government energy monopoly" this year, while financial reforms should bolster transparency and property rights. Growth is rising, inflation is falling and equity valuations remain reasonable. Stick with Mexican stocks.

Recommended

Short squeeze
Glossary

Short squeeze

When a large number of short sellers target the same stock, the price can rise in a self-perpetuating circle known as a 'short squeeze'.
6 Dec 2021
Has the “jam tomorrow” bubble popped already?
Stockmarkets

Has the “jam tomorrow” bubble popped already?

Fund managers have had a good year so far. John Stepek looks at what to expect from markets until year end.
6 Dec 2021
Ewan Markson-Brown: the joy of small companies
Investment strategy

Ewan Markson-Brown: the joy of small companies

Merryn talks to Ewan Markson-Brown of Crux Asset Management about why when it comes to emerging markets, he much prefers to invest in micro- and small…
3 Dec 2021
Forget socialism – shareholder capitalism is delivering
Economy

Forget socialism – shareholder capitalism is delivering

Many Millennials say they would prefer to live in a socialist society. That's understandable. But while socialism promises everyone ownership and powe…
3 Dec 2021

Most Popular

Three safe bets on the growing online gambling sector
Share tips

Three safe bets on the growing online gambling sector

Professional investor Aaron Fischer, creator of the Fischer Sports Betting and iGaming ETF, picks three of his favourite online gambling stocks.
29 Nov 2021
Making sense of the new minimum pension age rules
Pensions

Making sense of the new minimum pension age rules

The rules surrounding the minimum age at which you can start tapping into your retirement savings have been tweaked, but are still confusing. David Pr…
23 Nov 2021
Bubbles grow in global property markets as house prices continue to rise
Property

Bubbles grow in global property markets as house prices continue to rise

House prices grew by 6% in the year to mid-2021 in 25 global cities, with the German property market in particular showing signs of overheating.
3 Dec 2021