Five emerging market views on Mexican elections
By Jessica Tasman-Jones, 28 Jun 18
Mexico is set to lurch to the left when it goes to the polls this weekend with populist Andrés Manuel López Obrador, known by his nickname Amlo, the front runner in the presidential elections. Five managers weigh in on what Mexico’s politics mean for emerging market investors.
“In general, foreign investors seem to be more willing to give Amlo the benefit of the doubt, believing that he will not alter the prevailing economic stance, which has been characterised by relatively prudent fiscal policy, an inflation-targeting regime managed by an independent central bank and recent opening of certain sectors of the economy, including the important oil sector, to foreign investment. Locals are more concerned, believing that changes may be possible.
“I do not believe that the changes will be excessively negative for the Mexican economy and would be a buyer should asset prices underperform. One other risk to monitor, which is partially outside Mexico’s control, is the ongoing negotiation with the US regarding Nafta, which could potentially impact Mexico negatively.”
