Energy | Trade & Investmen | Banking & Finance | Business & Industry | Automotive | Construction, Housing & Mortgaging | Telecommunication & Technology | Media & Entertainment | Fishing, Farming & Agriculture | Hospitality & Tourism | Economy | Border & Migration | Politics | Crime & Safety |

Energy

• Mexico Still Working on Fenix Petrochemical Project
• Repsol Becomes Exclusive Buyer of Peruvian Gas for Export to Mexico
• Alfa’s Alpek to Build Petrochemical Plant in the U.S.
• Pemex to Invest $12 Billion (US) After Deadly Explosion
• Electricity Commission Hinders Wind Energy Projects




Trade & Investment
• Spain to Invest EUR 156 Million to Spur Commerce with Mexico




Banking & Financial Institutions
• Banks Heading for Mortgage Interest-Rate War
• Banorte Links with Telegraph Co. to Extend Services
• ING Mexican Insurance Unit to Pay $300 Million USD in Damages
• Banking and Securities Commission to Regulate Internet Banking




Business & Industry
• Alfa to Expand PET Plastic Capacity by 200,000 MT
• Desc Expands Particle-Board Ops with Acquisition
• Hospira to Start Operations in Mexico
• Writing and Arts Products Company Dixon Gathers Production in Mexico
• Vitro Finds Refuge in Glass Containers Division




Automotive
• June Auto Production Down 9.6% While Bus and Truck Production Grows
• Mexican Companies to Export Electric Vehicles to the U.S.
• Auto Parts Industry to Grow in Next 10 Years




Construction, Housing & Mortgaging
• Geo Reports MXN 2.2 Billion in 2Q Home Sales to Get USD280 Million Investment
• ICA to Raise USD230 Million In Capital Increase
• Govt. Housing Fund to Sell up to MXN 1.16 Billion in MBS
• Sofol Hipotecaria Casa Mexicana Adds New Partners




Telecommunications & Technology
• Mexican Govt. Filed a Suit Against Satmex
• America Movil Buys Paraguayan Unit of Hutchison Telecom
• Mexican Stock Market Suspends Trading in Unefon Shares
• Entrepreneurs Pushing Semiconductor Manufacturing Project Near Mexicali




Media & Entertainment
• Televisa Accuses Univisión of New Contract Violations




Fishing, Farming & Agriculture
• Government to Sell Salt Export Company
• Agriculture Ministry Slams Sugarcane Bill




Hospitality & Tourism
• Tourists Evacuated in Cancún Due to Hurricane Emily




Economy
• Mexico Covers All 2006, 2007 Amortization Needs
• Pension Fund Business Showed Net Profits of MXN 19.6 Billion
• Mexican Peso Rises to Nearly Two-Year High
• Formal Private-Sector Jobs Return to 2000 Levels




Border & Migration
• Mexico Says It Won't Sign Immunity Pact for U.S. Troops
• U.S., Mexico Plan Joint Operation to Fight Growing Violence
• U.S. Govt. to Help Mexican Counterparts Fight Violence, Pledge to Push for Guest-Worker Program
• Jorge Castañeda, Presidential Candidate, Says U.S. Must Liberalize Immigration




Politics
• PRI Faces Rupture Before '06 Presidential Vote
• Officials Approve Two New Parties for 2006 Vote
• PRI and PAN Might Ally to Win Mexico City Major Election




Crime & Safety
• Dangerous Fugitive Deported to Mexico

 Juan Casillas
  +011-525-55-281-8297

    Allan Holst
  +011-525-55-281-8297

   Susana Cervantes
  202-585-6561

Several newspapers reported that the Fenix Project, a proposed petrochemical joint venture with private companies, had been reduced to half its original size because Mexico's Finance Ministry declined to authorize discounts on raw materials — in this case naphthas — for the private sector companies involved. The Energy Ministry said in a statement that different government entities will continue to study the viability of Proyecto Fenix. It also said a final decision will be made once it has input from all of the parties involved.

Fenix partners include Pemex, Canada's Nova Chemicals, Indelpro, a joint venture of Netherlands-based Basell and Mexico's Alfa, and Grupo Idesa. The first phase of the Fenix Project called for investment of about USD1.9 billion for an ethylene and polyethylene complex, while a second stage would involve USD800 million for an aromatics plant with capacity to produce one million tons a year. While Pemex boosted its petrochemical output last year by 4% to 10.7 million metric tons, Mexico still imports large quantities of petrochemicals.

The Spanish oil and gas company, Repsol, has agreed with Peru to be the exclusive buyer of the Andean nation's natural gas for export to Mexico from 2009, reported Peruvian Energy and Mines Minister Glodomiro Sanchez. The 20-year contract with Repsol is for the export of 4.6 trillion cubic feet of gas from the Camisea gas field in southern Peru. Sanchez did not say how much the deal was worth. Peru LNG, the Camisea gas export consortium, has put the value of annual exports to Mexico at USD1.5 billion.

Peru LNG is building a USD2 billion liquefaction plant on Peru's southern coast, while Mexico also plans to build a plant on its coast to convert the liquid back into gas. Peru LNG said in the long term, it hopes to export the gas to the U.S. market, specifically California. Repsol reportedly hopes to take a 20 percent stake in Peru LNG, and is seeking 10 percent stakes in the development of the Camisea gas field and the gas transport consortium.

Alpek, a unit of Mexico’s second-biggest industrial company, Alfa, will build a petrochemical manufacturing center at its Cape Fear, North Carolina site, Alfa said in a statement to the Mexican Stock Exchange. The new complex will add 200,000 tons of resin manufacturing capacity for a total of 500,000 tons, the company said. The type of resin produced at the Cape Fear site is used to make plastic bottles for carbonated beverages, the company said. "We will benefit from using existing equipment and infrastructure on-site, along with enhanced internal logistics," said Alpek’s chief executive, Jesús Váldez, in a news release.

back to articles list

Pemex, prone to accidents in recent years, announced that over the next three years, it will invest USD12 billion in infrastructure maintenance in an effort to reduce deadly explosions and diminish pollution. The announcement came after last Friday's gas leak blast at a pipeline in the municipality of Cunduacán in the southern state of Tabasco. Two people were killed and 13 were injured in the blast. Top officials of Pemex, one of the world's largest oil-producing firms, announced on May 24 that the company would invest USD318 million to repair pipes and obsolete structures. Since December, the firm has suffered a series of accidents that killed a number of people and caused crude oil spills in several parts of the country, particularly in the states of Tabasco and Veracruz.

back to articles list

Mexico could develop at least 1,760 megawatts of installed capacity with the investment of USD2.2 billion on six wind energy projects, but the numerous procedures required as well as the lack of an interconnection contract authorized by the Federal Electricity Commission (CFE in Spanish) to the firms has put a brake on the projects of renewable energy.

Currently, the firms Fuerza Eolica/Clipper, EDF EN, Iberdrola, Endesa, Preneal and Gamesa are interested in developing wind energy projects in Mexico over the next two years. “We have six projects, each requiring 25 or 30 authorizations, and also the authorizations are for a limited time. Each project needs an endless number of procedures in order to continue to be in force,” said Carlos Gottfried, president of Fuerza Eolica.

back to articles list

Spain plans to invest EUR 156 million on “Plan Mexico” which is aimed at reinforcing investment and the presence of Spanish firms on Mexican soil, announced Spain’s Industry, Tourism and Trade Minister. The plan also calls for the promotion of Spain as a tourist destination in Mexico and an advertising campaign with a budget of EUR 523,000. In addition, Spain will invest EUR 34.5 million to support trade and EUR 121 million to support investments. Spain will also boost investment in sectors such as engineering, renewable energy, information technology and trade distribution.

Currently, the Ministry is analyzing the possibility of reaching an agreement with the small and medium firm sectors (PYMES in Spanish) in which cooperative modalities would be developed at a regional level.

back to articles list

Mexican banks are heading for another mortgage interest-rate war. Santander Serfin said it will launch a new plan offering an 11.85% interest rate that could go as low as 9.72%. At that level, the bank would have one of the lowest rates in the market along with HSBC. Isidoro Sánchez, mortgage business director of Santander, confirmed that the war to keep more clients will continue, but noted that rates will not go below 9% as it would not be cost-effective for the banks. Intermediaries get, on average, 40 base points in housing loans while they can obtain capital at around 10.50%. Sánchez stated the 11.85% rate will continue until December, and they expect to attract 6,000 new clients in the next 6 months with this strategy.

back to articles list

Grupo Financiero Banorte has teamed up with State-owned telegraph company, Telecomm-Telegrafos, to offer banking services in sparsely populated areas where it currently has no presence. Banorte Chief Executive Luis Peña said the alliance will ultimately enable the bank to reach potential customers at the 1,554 branches of Telecomm-Telegrafos.

Initial banking services offered will include opening an account, deposits, withdrawals and consulting balances. Other services, including checking, payment of utility bills and reception of remittances, will be added at a later stage, Peña said.

Telecomm-Telegrafos’ Director, Andres Figueroa, said the State concern will charge a quota per transaction on behalf of Banorte. He also mentioned officials have been talking with other banks and financial service companies, and the same kind of option will be available to them.

back to articles list

ING Comercial America, the Mexican insurance unit of financial services group ING, said it has been notified by a local court in Mexico City about a judicial ruling regarding the civil claim involving the Mexican company Grupo Fertinal and certain affiliates. According to the ruling, regardless of the actual damage that resulted in the underlying claim, Grupo Fertinal has been awarded approximately USD275 million under the policy plus consequential damages of USD 25 million. ING Comercial América is studying the ruling and intends to appeal. ING expects that, after the final outcome of this judicial procedure, the risk in the policy will be adequately covered by provisions taken as well as reinsurance coverage. As has previously been announced, ING Comercial América has been involved in a judicial procedure with Grupo Fertinal since September 2001 when Hurricane Juliette caused damage to Fertinal mines in the State of Baja California Sur. The dispute involves what amounts are due for certain hurricane-related damages under the insurance policy issued to Fertinal.

back to articles list

The National Banking and Securities Commission (CNBV in Spanish) has started working out rules for the regulation of Internet banking. The supervising authority is designing the rules so users will have at least minimum security measures to avoid fraud on the web. At first, the aim is for the banks to have equal plans to be able to confirm the authenticity of the user. Data that only the client will know, such as one’s personal address or complete name, will be required. The Conciliation Director of the National Commission for the Protection and Defense of the Users of Financial Services (Condusef in Spanish), explained the aim is for the process of making transactions to be similar to opening an account in a bank.

back to articles list

Alfa said its petrochemicals unit, Alpek, plans to increase PET plastic capacity in the U.S. by 200,000 metric tons a year to a total of 500,000 metric tons a year. In a news release, Alfa said the expansion calls for construction of a new plant at its facilities near Wilmington, N.C., which typically would take 18 months to complete. The Monterrey-based company said it wasn't revealing how much it plans to invest for competitive reasons. Alfa said that the U.S. market for PET plastic, used mostly to make soft-drink bottles, is growing at 8% a year. DAK Americas, Alpek's U.S. subsidiary, currently produces 300,000 metric tons a year of PET plastic at two plants in the Carolinas.

back to articles list

Desc said it has expanded its particle-board business with the acquisition of Ponderosa Industrial de Mexico's particle board operations. Desc, which has been selling assets in recent years, said its business plan includes "not only divesting, but also investing" in industries where it sees opportunities for growth. Desc said the acquisition, through its unit Rexcel, will expand its particle-board and laminate sales by 50% to more than USD100 million a year. The particle-board business focuses on the market for kitchen and dining room furniture, countertops and closets, taking advantage of the demand generated by the country's housing construction boom. Desc didn't reveal the financial terms of the acquisition.

back to articles list

The pharmaceutical company, Hospira, will start operations in Mexico as an independent brand of Abbott. The firm will control and manage its operations in Latin America from Mexico. It has 1,300 clients and annual sales of USD50 million in the region. Hospira will start operations in Mexico with 90 employees to market and distribute its broad portfolio of specialty pharmaceuticals to the public and private sectors. As a part of Abbott’s growth strategy, Mexico offered the best opportunity due to its economic stability, potential growth of the market, its geographic situation and the fact that it is Latin America’s largest pharmaceutical and hospital market.

back to articles list

The Dixon Company, a manufacturer of school articles, is focusing its world production in Mexico. The president of the Dixon Ticonderoga Company Group (DTC), Diego Cespedes Creixell, stated that, following a 1999 plan, they began transferring their U.S. plants to Mexico, beginning with their Pennsylvania factory which makes thick pens. Next came a Crayola and chalk factory from Ohio, and by the end of this month, they will move their eraser and marker factory now in Canada. On schedule for this November, they will begin moving a pencil factory from Missouri. The initial options for moving its production site were Canada or the United States, but they chose Mexico due to better sales control and because labor is less expensive. In Mexico, Dixon-FILA is the most diversified company in its sector and controls 70% of the colored pencil, graphite, tempera paints and Crayola market.

back to articles list

Personalized service, combined with long-standing business relationships, has helped make Vitro's glass container division a bright spot for the nearly century-old company that has posted net losses for two consecutive years. Last year, containers represented 41% of the company's USD2.27 billion in annual sales, and 53% of its USD353 million in EBITDA. Still, Vitro, as a whole, reported a USD21 million net loss. With Vitro's other business segments, particularly flat glass, not doing well, containers have become the area analysts — uncomfortable with the company's high debt load — can find reassurance. As of the end of March, Vitro owed USD1.5 billion. As the market evolves, Vitro has found itself looking for ways to adapt. For containers, that means offering clients options like plastic sleeves for glass soda bottles or venturing into niches like fragrance to compensate for market losses from plastics and other materials. Excluding companies in Mexico that make their own containers, Vitro supplies 89% of the domestic demand for glass bottles.

back to articles list

Mexico's auto industry slumped again in June, with production and exports down for the year, industry association AMIA said Tuesday. Despite the disappointing data, AMIA said it expects the industry to pick up during the second half of the year as projects planned by manufacturers take off. Mexico's auto industry turned out 127,980 vehicles last month or 9.6% less than in June 2004, while car makers shipped 94,587 units abroad, or 8.2% less than in the same month a year ago. Car sales rose 4.6% in June, when Mexicans purchased 84,897 vehicles. For the year-to-date, domestic sales were up 3.5% to 527,511.

The bus, truck and tracto-truck manufacturing industry reached a record production of 36,068 units during the first half of the year. According to the National Association of Bus, Truck and Tracto-Truck Producers (ANPCT in Spanish), sales of this sector at a national level in the same period were 29.1% higher compared to the same period in 2004. In their first semester report, it was specified that the firms gathered under ANPCT exported 20,061 units, an increase of 6.8% volume for the first half of last year, a record figure for a first half in that industry.

back to articles list

The first passenger and cargo electric vehicles are being produced in the State of Hidalgo. Nine of these units are to be shipped to Hawaii to be used at the Honolulu International Airport. The cars were built by Electric Vehicles Internacional de México who wants to extend its presence in the Mexican market where it has already sold 80 cargo vehicles. A tow truck with a trailer costs around USD350,000. Other cargo units could reach USD600,000. Another Mexican company that expects to export electric vehicles to the U.S. is Grupo Eléctrico Motorizado. After 5 years working on the project and an investment of MXN 6 million for development, the company has 17 vehicles ready for export to Crono Sport in Philadelphia. The cars will be used for public transportation on a small scale.

back to articles list

The National Auto Parts Industry will grow at a fast pace in the next 10 years, while the automotive sector will face important challenges, said the National Auto Part Industry director (INA in Spanish). “Growth in the auto-part sector in 2005 will be 10%, and we think that for 2006 it will come to 8%,” said the official. He added that the difference between the export value of light vehicles and that of auto parts is being reduced. On the other hand, he referred to the challenges being faced by the automobile industry in general, such as the price increases in raw materials, the dynamism in other countries such as Brazil, Turkey and India, and maintaining competitiveness.

back to articles list

Home builder Corporacion Geo expects to report more than MXN 2.2 billion in second quarter sales later this month. In a statement to the Mexican Stock Exchange, Geo said it sold more than 7,900 homes during the three-month period, or at least 9% more than the 7,240 units it sold in the second quarter of 2004. The company also expects to post an improvement of 35% or more in net profit, compared with the second quarter of 2004. Last year, for the April-June period, Geo reported a net profit of MXN 158.7 million on sales of MXN 1.76 billion. GEO announced it concluded the second stage of its USD280 million association with Prudential Real Estate Investor (PREI), an amount USD100 million higher than foreseen. This investment program will allow GEO to purchase land for future developments and make it possible to free cash and boost growth. In 2004, GEO started an association with PREI, a real estate investment unit of Prudential, for the acquisition of land for future construction.

back to articles list

Engineering and construction company Empresas ICA said its shareholders agreed to a capital increase of USD 230 million through the issuance of new shares. The shares will be issued in Mexico and offered in Mexico and various foreign markets. ICA plans to use the additional capital to bolster its financial position as it prepares to bid on major infrastructure projects that it expects to announce in coming months. The Ixe brokerage said in a report that the capital increase, while dilutive to shareholders, could have a positive effect on profitability as ICA has identified significant projects to bid on over the next three years.

back to articles list

Mexico's government-run home financing agency, Infonavit, plans to sell 1.16 billion pesos in mortgage-backed securities through the development bank, Nacional Financiera, or Nafin. In a filing with the Mexican Stock Exchange, Nafin said the notes, denominated in inflation-indexed investment units called UDIs, will have a maximum maturity of 20 years and will be backed by 7,833 mortgages. Infonavit Director Victor Borras said late last month that Infonavit plans to issue MXN 4 billion in mortgage-backed securities this year, double the amount sold last year. Infonavit is Mexico's largest mortgage lender with a loan portfolio of more than MXN 425 billion. The development of a market for mortgage-backed securities is among the measures being promoted by the government in support of its housing expansion plan. Officials expect 750,000 home loans will be granted annually by 2006.

back to articles list

The Special-Purpose Mortgage Provider (Sofol) Hipotecaria Casa Mexicana is adding three new partners: the fund Advent Internacional Corporation, José Madariaga and Pedro Rodríguez. Advent has been in Mexico since 1996 while Madariaga has also had a long financial career in the country. Rodríguez Sierra is the founder of Aeroplazas (a group related with airports, food and beverages in the tourist sector) and has worked in the construction sector. Together, they will invest in Sofol, founded by Jaime Corredor Esanola in 2002, up to USD50 million to ensure the firm’s long-term growth. The issue is still subject to respective guarantees. The new investors will have 49% of the firm’s equity capital while Corredor Esanola and his group will continue to have control and management of Hipotecaria Casa Mexicana.

back to articles list

The Mexican government filed a suit against Servicios Corporativos Satelitales (SCS), the firm that controls Satmex, to claim a debt of USD188 million known in Spanish as ‘el menoscabo’. The litigation could result in the government controlling the majority of Satmex’s stock since the debt guarantee is stock held by Firmamento Mexicano, the firm that controls SCS. At present, the Communications & Transport Ministry still holds 23.47% of Stamex’s stock, i.e., the government is co-owner of Satmex but also a creditor to its controlling company. The case could last years since there could be 3 instances and almost all the awards given by the judge can be appealed by the other party.

back to articles list

America Movil said Wednesday it had completed acquisition of 100 percent of the Paraguayan unit of Hutchison Telecommunications, which is a unit of Hong Kong-based Hutchison Whampoa Group. Hutchison Telecommunications had announced the sale of the Paraguay unit last May as part of its strategy to exit markets "where we do not have ambition for growth.” Hutchison Telecom did not disclose the sale price at the time, nor did America Movil. The five year-old Paraguayan company, which provides mobile and value-added services, ended 2004 with 244,000 subscribers, up 75 percent from 2003, while revenues grew 68 percent to about USD30 million. Earlier this year, America Movil said it planned to invest USD 6.5 billion over the next three years to finance rapid subscriber growth in Latin America, with expectations of adding between 17 and 17.5 million new subscribers this year.

back to articles list

The Mexican Stock Exchange suspended trading Friday in shares of Unefon, saying the wireless phone company has not met minimum standards for the amount of shares floating in the market. The exchange said the shares will remain suspended until the company meets minimum requirements for listing. Unefon A shares last traded July 4 at MXN 3. The company had planned earlier this year to delist from the market, citing low liquidity, but decided against it at an April 29 shareholders meeting. Unefon is controlled by businessman Ricardo Salinas Pliego, who is in the process of delisting from the New York Stock Exchange the American depositary receipts of broadcaster TV Azteca, wireless phone company Grupo Iusacell, and retail/consumer banking concern, Grupo Elektra.

back to articles list

In the year since two entrepreneurs announced their Silicon Border project, they have broken ground on a huge parcel near Mexicali and forged agreements that will draw technological development from Asia to North America. Their goal is to transform Mexicali into the world's next semiconductor manufacturing center.

A major step toward making Silicon Border successful has been a commitment of over USD2 million from the Mexican federal and Baja California state governments to design and market the industrial park. President Vicente Fox has offered 10 years of tax-free status to firms that locate in the park and invest USD1 billion or more. The Silicon Border entrepreneurs broke ground June 22 west of Mexicali on one of two parcels totaling more than 15 square miles. The value of the land together with other investments so far has reached nearly half a billion dollars. "This is a better location than (Asia) because it's a lot closer to the engineers who design the products. It's also a lot closer to the end market," one of the entrepreneurs said.

back to articles list

Televisa has added new claims to a lawsuit against Univisión, the U.S./Hispanic media powerhouse. In addition to charges that Univisión is improperly withholding royalties, Televisa alleges that it violated the terms of its programming contract by airing Televisa soccer matches from Mexico but refusing to air Televisa commercials, said Alfonso de Angoitia, executive vice president at Televisa. Under the programming contract, Televisa supplies Univisión with primetime and other programming in return for a cut of the advertising revenue generated by those shows. Univisión denied breaching any term of the contract.

Meanwhile, a new point of contention is set to surface next year over Univisión's use of Televisa content on univision.com. When the programming contract was renegotiated in 2001, the parties agreed to defer discussion of Internet content for five years. Televisa asserts that under the contract, Univisión does not have the right to use its material on univision.com, while Univisión states the contrary.

back to articles list

The Economy Ministry plans to sell, in the short term, the State-owned company Exportadora de Sal de Guerrero Negro (ESSA), the world’s largest salt mine that is mined jointly with Japan’s Mitsubishi. Economy Minister Fernando Canales Clariond will travel this week to Japan to sign the 16th agreement to sell salt to the Japan Soda Industry Association (JSIA) which is comprised of the 28 most important Japanese caustic soda and sodium producers. Mexico meets 50% of the Japanese industry’s salt demand. Last year, Mexico exported about 3.5 million tons of salt to Japan.

back to articles list

Mexico's sugar industry would be "unviable" and unable to cope with increasing competition from other sweetener markets if a bill passed by Congress becomes law, the Ministry of Agriculture said. In a three-page statement, the Ministry launched into a stinging attack of the bill, which was approved by Congress last month but is expected to be vetoed by President Vicente Fox because it contains measures that favor sugarcane growers. "The over-regulation of a productive sector — which is what this law project means — discourages investments, automatically devalues the assets of the companies, paralyzes operations and limits the development of new products," the Ministry said. The Law for the Sustainable Development of Sugarcane was passed by the lower house of Congress on June 21 in a 312-136 vote, but has yet to be published in the official government gazette, which is necessary for it to take effect.

back to articles list

A massive evacuation of tourists in Cancún, one of the world's largest resorts, began Sunday, with hundreds of buses dispatched to move tens of thousands of vacationers away from Hurricane Emily, which was heading for a direct hit on Mexico's coast. The size of the task was daunting: about 500 buses were ordered to move 30,000 tourists in Cancun — part of a total of 70,000-80,000 mostly foreign visitors to be evacuated statewide to temporary shelters in ballrooms and convention centers. Authorities also launched a large-scale evacuation of offshore oil platforms, ordering 15,000 workers off rigs in the Gulf of Mexico and leaving less than 1,000 attendants behind. Pemex said the move included closing 63 wells and halting the production of 480,000 barrels of oil per day. Hurricane center meteorologist Dave Roberts said Emily was the strongest storm to form this early in the Atlantic season since recordkeeping began in 1860.

back to articles list

Mexico's federal government has secured funds to cover all of its foreign debt amortization needs in 2006 and 2007, the Finance Ministry announced. In a move designed to reinforce international investor confidence through a coming election year and beyond, the Ministry has stored up a war chest big enough to meet all of the nation's international financing needs for more than two years. As part of the bulletproofing measures, the Finance Ministry took an unusual step in actually purchasing from the Central Bank the roughly USD2.88 billion it will need to meet its foreign-debt payments through 2007, the Ministry said. That will insulate Mexican bond markets from any volatility that may be provoked by what is shaping up to be a bitterly fought presidential election next year. Mexico's Finance Ministry said the plan also reduces vulnerability of public finances to such external factors as rising interest rates and currency speculation.

back to articles list

The management of pension funds has given the companies working on it (Afores) a net profit of MXN 2.4 billion in the first five months of the year. Also, the companies specialized in investing pension savings in securities (Siefores) produced earnings of MXN 17.9 billion in the same period, as indicated by reports of the National Commission of the Retirement Savings System (Consar). The total benefit of both type of companies rose to MXN 19.6 billion, and the business of managing and investing pension savings seems to be so profitable that, in the first five months of this year, there was no Afore or Siefore that did not register a net profit.

back to articles list

Spurred by a stable economy and high interest rates, Mexico's peso is near a two-year high against the dollar. The currency ended trading Thursday at 10.66 per dollar, a 4.6% increase for the year, putting it among the world's strongest currencies against the dollar in 2005. At the peso's low point in May 2004, it took 11.67 pesos to buy a dollar.

International investors have been attracted by Mexico's interest rates of more than 9%, snapping up peso-denominated debt that many see as a bargain given Mexico's solid growth and low risk compared to other developing nations. That strong demand has boosted the currency's value against the dollar. Billions of dollars from salaries sent home by migrants working in the U.S. have also helped bolster the peso, analysts said.

Equity investors also are profiting. Mexico's IPC Stock Index closed Thursday for a third consecutive record high, up 79.83 points, or 0.6%, to 14,085.06. The index is up 9% year to date.

back to articles list

The number of formal, private-sector jobs in Mexico rose 0.3 percent in June to 12,799,783, the highest level since December 2000, when President Vicente Fox took office. When Fox, who campaigned to create one million jobs per year, assumed the presidency, the figure was 12,775,125.

back to articles list

Mexican officials said they have already made it clear to Washington that they will not sign a pact to grant U.S. military personnel special immunity from the International Criminal Court. Last year, Bush signed into law a measure to cut off hundreds of millions of dollars in foreign aid to countries that belong to the court but have not signed a bilateral immunity agreement with the United States. While Mexico has signed onto the court, Assistant Foreign Secretary Geronimo Gutierrez said his country does not fear any repercussions over the policy. Mexico gets almost no foreign aid from the United States. On Tuesday, Foreign Secretary Luis Ernesto Derbez said, "We have made it very clear to the U.S. government ... we will not grant this exemption."

back to articles list

The U.S. and Mexican governments are fine-tuning a coordinated "Mirror Operation" on the northern border to fight the growing violence associated with organized crime and drug trafficking. José Luis Santiago Vasconcelos, who heads the organized crime division of the Attorney General's Office (PGR), said the operation will increase coordination efforts between law enforcement in Mexico and the United States. While he did not give many details, he said police "will be working on the scene and exchanging information in real time to trap criminal organizations on both sides of the border." Around 700 deaths so far this year have been attributed to drug-related killings, and many of these are believed to be linked to the ongoing turf war carried out between the gangs in such hotspots as Nuevo Laredo and Sinaloa.

back to articles list

Governors along the U.S.-Mexico border agreed Friday to work for the passage of a temporary worker program for Mexicans in the U.S. and to ask both countries to declare the border a strategic security zone deserving of federal funds for public safety programs and anti-terrorism measures. The governors, wrapping up a two-day conference, also pledged to stand together against the mistreatment of Mexican migrants, both legal and undocumented, who live and work in the U.S. Mexican President Vicente Fox, who addressed the gathering in a video message, spoke against the border patrols and said Mexico will stand against anyone acting outside the law. The governors also discussed cross-border violence connected to drug traffickers and youth gangs. The resolution reached Friday calls for better training of the Mexican police, programs to prevent violence along the border and the creation of a database containing the identities of members of criminal organizations, including the Zetas, a group of Mexican soldiers-turned-drug hit men, believed to be controlling Nuevo Laredo.

back to articles list

While Mexico has enhanced security since the Sept. 11 attacks, future cooperation hinges on U.S. willingness to liberalize its immigration policies, former Mexican Foreign Minister Jorge Castañeda warned Congress on Tuesday. Mr. Castañeda, who is running as an independent in the 2006 presidential race, said security must be combined with what he called the "whole enchilada" — legalization for the 6 million Mexicans living in the U.S. illegally, visas for Mexicans desiring to come in the future and economic development for impoverished interior regions responsible for the exodus. But Sen. Christopher Dodd, D-Conn., pointed to the difficulties inherent in enacting a massive immigration-and-security package and instead suggested that both countries tackle measured "confidence-building" steps. Castañeda, who resigned from President Vicente Fox's Cabinet in 2003, acknowledged that Mexico must do more to crack down on organized crime gangs operating with near impunity along the Southwest border. He also spoke of the need for Mexico to control its southern border, which Central Americans and other foreigners cross en route to the U.S.

back to articles list

A year before the presidential election, the Institutional Revolutionary Party (PRI) headed toward a destructive split resulting from the bitter enmity between its top leaders, probable presidential nominee Roberto Madrazo and teacher’s union head Elba Esther Gordillo. Madrazo was to have resigned as PRI’s chief to campaign full time for next year's election. He would have been replaced by Gordillo under party rules. However, he delayed his move after the PRI leadership council voted unanimously to ask him to stay until early August. That step by the council, which he controls, will keep Gordillo — who, as general secretary, is the party's No. 2 leader — from taking Madrazo's place. Some analysts doubt that a rupture will occur because it would break PRI's tradition of resolving its differences. Also, the loss of the teachers' vote to another candidate or party would be devastating to the party's chances next year. Still others think the distrust and enmity between the two key figures might mean a split is inevitable.

back to articles list

Two new parties will be on Mexico's July 2 presidential ballot next year, the Federal Electoral Institute ruled Thursday. The agency, which oversees Mexican elections, has approved the New Alliance and the Social Democratic and Farmer Parties. The pair has functioned up to now as political groups without party status. Each must win 2% of the vote next year to retain their party designation, which qualifies them for generous government campaign financing payments. New Alliance includes figures from the left-leaning Mexico Possible Party that disappeared in 2003 after failing to reach the minimum vote level. The Social Democrats are based on a teachers' union group. New Alliance's leader has denied the party has any link with PRI’s general secretary and teachers’ union leader, Elba Esther Gordillo. Officials from the Labor Party (PT) and the Democratic Revolution Party (PRD) have accused New Alliance of being secretly backed by the teachers’ union.

back to articles list

The Institutional Revolutionary Party (PRI) group, Unidad Democrática, backed former deputy Beatriz Paredes to become PRI’s candidate for next year’s Mexico City major election. The group did not discard the possibility of allying with the National Action Party (PAN) to win the election. Enrique Jackson, representing the group, said there is a long way to go for PRI if it is to win the city back. He also stated that the group represents an alliance of great forces, even PAN, which is willing to participate in the primary elections to support a candidate that will “lead us to victory.”

back to articles list

A fugitive considered one of Mexico's most dangerous criminals was arrested in Southern California and deported, nearly 19 years after a sensational armed escape from a Mexican prison courtroom. Alfredo Rios Galeana was surprised by U.S. Immigration and Customs Enforcement (ICE) agents at his home in the city of South Gate just south of Los Angeles. Rios, unaware he would be handed over to Mexican authorities, agreed to a voluntary deportation, a choice frequently made by those who hope to avoid detention or formal deportation orders that can bar them from returning the United States. Rios, a former paratrooper in the Mexican military, was featured on Mexico's most wanted fugitives list for his alleged role in violent bank robberies in Mexico City during the 1970s and 1980s, according to ICE. He is wanted in Mexico on eight felony warrants that include charges of murder, kidnapping and robbery.

back to articles list

Subscribe Unsubscribe Technical Support

Los Angeles| Mexico City | New York | Palo Alto | Washington, D.C.
ManattJones Global Strategies,LLC