NASDAQ reported in May on the impending boost to Mexico’s market and its strong economy,writing that,“the Mexican market may be poised to pop.” With the coming presidential elections on July 1st and the diversity of the Mexican economy,NASDAQ foresees a coming boom and is advising investors worldwide to take notice.
“The diverse Mexican economy has been growing at a sustainable pace of 3.5-5.5 percent over the past three years,writes NASDAQ. “The political mood seems to be shifting incrementally in the direction of further liberalization.”
Mexico has increased its already strong ties to the U.S. and the rest of Latin America,which has helped to bolster its economy,and presidential candidate Enrique Pena Nieto,who is widely favored to win the upcoming election,has already proposed a bold slate of reforms.
According to NASDAQ,Pena Nieto has indicated that he will open up the now state-controlled PEMEX to private investment,and plans to increase the country’s tax base,which is expected to liberalize the job market and grow the economy by at least 6 percent. Furthermore,it is already being reported that Mexico’s problems with drug cartels along its northern border will lessen if Pena Nieto takes office.
Investors interested in profiting from Mexico’s stable economy have a variety of options,including investing in Mexico real estate,snapping up easily tradable American Depository Receipts (ADRs),or buying into the iShares MSCI Mexico Investable Market ETF,which provides exposure to a variety of sectors in Mexico’s economy,including consumer staples,telecommunications and materials. This fund also provides access to a variety of companies that are not listed as ADRs in the US market,and pays a 1.5 percent dividend yield.
Fortunately there is still time for international investors to look over the potential offerings,as the new president will not take office until December and as a result the reforms will begin to take effect next year.