Analysis

E-commerce expansion in Mexico provides another platform for domestic consumption
OBG
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The Mexican economy has remained healthy due to high levels of manufacturing and trade, with the domestic market also playing an increasingly critical role in GDP expansion on the back of rising incomes. As Mexicans become better connected, both in terms of ICT use and global trade, domestic consumption is displaying new patterns through e-commerce. The rise of online shopping has resulted in growing…

Analysis

Innovative banks and new regulations in Mexico push inclusion through technology
OBG
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Despite its solid performance amid uncertain macroeconomic conditions, Mexico’s banking system has lagged behind in its ability to increase the availability of financial services across the country. To address this, the authorities have recently approved a number of regulatory changes to structure the provision of IT-based financial services. The move is expected to accelerate the adoption of new…

Analysis

Seismic activity in Mexico calls for improved insurance products and industry regulation
OBG
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The two earthquakes that shook Mexico on September 7 and 19, 2017 had a considerable impact not only on the country, but on the insurance industry as well. The tragic events, the most significant of their kind since 1985, resulted in the death of upwards of hundreds of people and the large-scale destruction of infrastructure and homes in Mexico City and other regions. On top of their human and material…

Analysis

Pension funds remain a critical component of Mexico's capital markets
OBG
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Since reforms in the 1990s, pension funds have become a key investor in the country’s growth. Their presence has expanded from traditional investment vehicles, such as sovereign debt, to more sophisticated products that have brought variety to Mexico’s capital markets and channelled financing to infrastructure projects. Pension funds account for 15% of GDP, according to March 2018 figures by the…

Analysis

Mexico's peso volatility affects businesses, investors and individuals
OBG
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The Mexican peso has long been viewed as the bellwether of emerging market currencies and a signal of overall market sentiment. While it is the second-most traded currency among emerging markets, after the Chinese renminbi, the peso is considered the more accessible of the two as it can be traded around the clock. A period of stability when the peso equalled roughly MXN13:$1 from mid-2009 to the end…

Analysis

Government engagement, rising commodity prices and new technology bode well for Mexico's mining sector
OBG
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Over the past decade, commodities have experienced a bumpy road across the board. The fall in global prices in 2012 followed by the newly imposed royalty tax in 2014 and an increasingly unpredictable security situation in many of Mexico’s northern states severely impacted the industry. However, a spike in commodities prices throughout 2017 and 2018 has seen a jump in prices of several key metals…

Analysis

Exploration efforts tap into new hydrocarbons deposits in Mexico
OBG
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With the reshaping of the energy sector opening up the industry to new investment, anticipation around how the reform will expand Mexico’s hydrocarbons reserves and push production upwards has been building. So far, important oil and gas discoveries – both by major oil firms as well the state-owned firm Petróleos Mexicanos (Pemex) – has already brought optimism to the sector. As opposed to downstream…

Analysis

International and domestic energy brands battle for downstream market share in Mexico
OBG
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With the majority of investments coming into the sector through the energy reform, and with the results of this expected to manifest in the medium term, one segment of the market is already seeing an unprecedented level of change. Liberalisation in the downstream petroleum distribution market, part of the ongoing reforms to the energy sector launched in December 2013, has attracted international and…

Analysis

Regulatory changes in energy sector attracting private financing in Mexico
OBG
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Besides opening up the market for private participation in the hydrocarbons sector, Mexico’s fast-moving energy reform is also strengthening the use of renewable energy sources within the country’s electricity grid. Although the use of renewables has experienced an organic expansion over the years, new market-driven mechanisms, combined with rising domestic and international interest from investors,…

Analysis

Mexico focuses on more sustainable water-management policies
OBG
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Mexico receives 1.49trn cu metres of rainwater a year, 67% of which falls between June and September. Its geography in terms of hydrology can be divided roughly into two regions – north and south – based on their distinctive socio-economic and environmental characteristics. The south tends to be more rural, with plentiful rainfall. The north, which encapsulates two-thirds of Mexico’s land mass,…