Mexico has high oil reserves. The government there earns significant revenue from oil and energy resources. Besides, Mexico has huge potential in the telecom sector. The exports in the telecom sector are on the rise. The country has passed several structural reforms to encourage competition, attract investments from private players. The country has a stable fiscal management as well as macroeconomic management.
Mexico’s Equity Market is Outperforming Latin American Markets
According to online reports, Mexico’s equity market has been able to outperform emerging markets in Latin America. Mexico is slowly and steadily increasing its exports to other countries in the world including the US. The country is a leading exporter of cars and automobile parts to the US.
Financial Services Companies Perform Well in Mexico
The country’s mining sector has witnessed significant progress in recent years. Experts like Teodoro Lavin Sodi believes that Mexico’s banking sector is fast expanding. There are new opportunities in that sector. There are a number of features like low overall loan penetration, monetization of energy and oil industries in the equity market and this helps the financial services companies to perform well.
Global Investors Concerned Over Peso Devaluation
Mexico’s peso is regarded as one of the most liquid currencies, globally and its prices very often. The peso prices are very much associated with Mexico’s oil assets as well as the government’s dependence on the oil assets for tax revenues.
Recent fluctuation in the peso prices made it plunge at an all-time low price when compared to US dollar at the beginning of the year. The poor performance of the Peso has left the global investors concerned and frustrated.
Economists Believe that Country Should Focus in Doing Energy Reforms
The nation’s economists and analysts are trying to figure out the issues that led to peso’s devaluation. They think that the country should focus on more exports than imports as that can enhance Mexico’s foreign reserves. In this context, oil is a natural resource that is available in abundance in Mexico yet it represents only 10% of the country’s exports and at the same time, the prices of oil products are high in the Mexican markets.
The government of Mexico should focus on doing energy reforms. Acclaimed private players like Pemex are encouraged to invest in Mexican markets. The Mexican government is planning strategies to enlist the energy assets of the country. This and other similar steps can lead to the enhancement of foreign direct investments in the country.
Besides the energy sector, Mexico is gradually boosting its telecom sector through appropriate reforms. Post implementation of telecom reforms in the country there has been a significant drop in telecom prices and this is one of the many ways by which the country is making a profit in the sector.