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Energy
Senate Passes Energy Reform Bill
October 23, 2008
The Senate has overwhelmingly passed a watered-down version of President Calderon’s energy reform proposal to overhaul the country’s oil sector. The legislation features seven measures and now goes to the Lower House. The bill gives Pemex more freedom to undertake projects with private firms, but excludes the provisions of Calderon’s original initiative that would have allowed those firms a stake in the oil or any eventual profits. Under the amended proposal, Pemex can only award services contracts to private companies, which in turn must share technology with the firm.
AMLO Leads March Against Oil Reform
October 23, 2008
Former presidential candidate for the Broad Progressive Front (FAP) – a party coalition made of most of the country's leftist parties – Andres Manuel Lopez Obrador (AMLO), has greenlighted a plan calling for a series of actions to defend the national oil industry from the participation of private companies in it. AMLO's Oil Defense Movement consists of a series of demonstrations, protests and other so-called civil resistance actions.
Pemex January-September Crude Output Falls 9.7% To 2.82 Million B/D
October 20, 2008
Pemex crude oil production fell 9.7% during the first nine months of the year to 2.82 million barrels per day (b/d) as Cantarell’s output continues to decline and dropped 31% to 1.06 million b/d during the period. Meanwhile, Pemex spent USD 19.6 billion during the first nine months of the year importing fuel, up 71% from the year-ago period, while exports dropped 18% from January to September.
Pemex To Invest USD 3.9 Billion To Reduce Pollutants
October 20, 2008
Pemex announced that it will invest approximately USD 3.9 billion between 2008 and 2012 in different projects that will allow pollutants to be reduced by as much as 30%. After the projects are developed, Pemex said that Co2 emissions might be reduced by approximately 13 million tons. The projects include the cogeneration plant in the Nuevo Pemex Gas Processor.
Pemex Awards Contracts To Oceanografia, PGS Onshore
October 20, 2008
Pemex Exploracion y Produccion has awarded a USD 118 million contract to Mexican exploration company Oceanografia, which has been connected, according to local media, to Mexico’s former First Lady Martha Sahagun’s sons, who are accused of influence peddling. The contract is for the construction of a 21km gas duct to connect two platforms in the Campeche sound. Pemex has also awarded a USD 123 million contract to Norwegian oil firm PGS Onshore to locate hydrocarbon reserves at the Chicontepec oil fields.
Slim Acquires 7.6% Stake In Bronco Drilling Company
October 20, 2008
Mexican billionaire Carlos Slim has acquired a 7.6% stake, or 2.2 million shares, in U.S. oil firm Bronco Drilling Company for approximately USD 15.4 million through his construction company Carso Infraestructura y Construccion (CICSA). Bronco Drilling Company provides contract land drilling and workover services to oil and natural gas exploration and production companies in the U.S.
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Mining
Asarco Says Sterlite Deal Ends, GMex Could Regain Control
October 22, 2008
Bankrupt U.S. copper miner Asarco LLC said it is officially terminating a USD 2.6 billion agreement to be purchased by India’s Sterlite Industries after the Indian miner said it could not close the deal. In addition, Asarco’s former parent company, miner Grupo Mexico (GMex), said that U.S. judge Andrew S. Hanon rejected Asarco’s accusations that it had conspired and fraudulently manipulated the firms’ operations to lead Asarco into bankruptcy. Experts said that after such ruling, GMex could be granted the option to regain control of Asarco.
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Trade & Investment
Mexico Posts USD 2.68 Billion Trade Deficit In September
October 23, 2008
Mexico posted a USD 2.68 billion trade deficit in September, wider than the USD 2.25 billion gap posted in August, as falling oil sales weakened exports. Total exports rose 9.5% from a year earlier to over USD 24 billion, with oil-related exports down 5.3%. Non-oil exports were up 12.5%. Imports in September were over USD 28 billion, up 17.8% over the same month in 2007. Imports of intermediate goods were 15.8% higher and consumer goods imports were up 21.2%. Imports of capital goods rose 26.6%. Oil-related imports were up 70.3%.
Mexico, Cuba Seek To Boost Bilateral Trade Ties
October 21, 2008
President Calderon and Cuban Foreign Minister Felipe Perez Roque met and discussed options to deepen the two countries’ bilateral trade, which increased by about 80% during the first eight months of 2008. In February, Mexico agreed to restructure USD 400 million in debt that Cuba’s central bank had with Mexican development bank Bancomext, reinitiating financial relations between the two institutions after a six-year freeze and setting the stage for a rebound in bilateral trade.
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Banking, Insurance & Finance
ABM: Mexico’s Banks Not Using New Banxico Funding Facilities Yet
October 22, 2008
According to officials from the Mexican Banks Association (ABM), Mexico’s banks have not yet made use of additional short-term funding facilities set up recently by the Bank of Mexico (Banxico) to guarantee liquidity in the market. ABM said banks have continued using the traditional daily credit auctions, and are operating without liquidity problems. Banxico introduced new short-term funding facilities for banks which can obtain loans against their reserve requirements or via repurchase agreements using a variety of government and corporate debt instruments.
Siefores Lose MXN 18 Billion In Pension Funds In One Month
October 22, 2008
According to pension regulator Consar’s monthly reports, pension fund managers’ (Afores) investment vehicles (Siefores) lost approximately MXN 18 billion in pension funds in only one month as the peso’s depreciation and the current global financial crisis hit the sector. Losses were registered in Siefores 3, 4 and 5, which manage pensions for workers that are between 18- and 45- years-old.
Inbursa To Open 100 Branches In 12 Months With La Caixa
October 24, 2008
Mexican financial group Grupo Financiero Inbursa plans to open 100 branches over the next 12 months as part of its retail banking joint venture with the investment arm of Spanish savings bank La Caixa. Earlier this month, Criteria Caixacorp acquired a 20% stake in Inbursa for about MXN 25.67 billion through a capital increase and public tender offer.
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Business & Industry
Mexico Brings Forward USD 3.9 Billion Business Credit Plan
October 21, 2008
The government announced it will offer USD 3.92 billion in loan guarantees to help Mexican firms refinance commercial debt and avoid a commercial credit crunch. The Finance and Public Credit Ministry (SHCP) said the guarantees, which will be offered through development banks Nafin and Bancomext, were slated to begin November 1, but have been brought forward. The aim of the program is to give assurances to private buyers of the debt who have become averse to risk in the current financial situation, and at the same time to keep down the cost of refinancing for local companies.
U.S. Crisis Threatens Central American, Mexican Textile Sector
October 22, 2008
According to experts, the economic slowdown in the U.S. is the latest threat to the struggling clothing and textile industry in Mexico and Central America. U.S. underwear and hosiery maker Hanesbrands said last month it was closing four sewing plants in Central America and Mexico as part of a strategy to cut costs and streamline production. Mexican clothing producers say they could lose up to 18,000 jobs by the end of the year.
Footwear Industry, Authorities Seek To Attract Big Companies
October 20, 2008
Mexico’s footwear industry, along with federal and state authorities, announced an incentive program offering reductions in production costs of as much as 20% in order to attract big international firms’ footwear production to Mexico. Mexico’s footwear manufacturers are looking forward to competing with China’s production costs and bringing brands such as Adidas, Tommy Hilfiger, Converse and Reebok to Mexico.
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Automotive
Hella To Open First Electronics Plant In Mexico
October 23, 2008
Hella, a global supplier of automotive electronics and lighting, announced that it will hold the grand opening of its first electronics plant in Mexico. Hella said that the 275,000-square-foot facility, which will be located in the state of Guanajuato, will manufacture transmission range and pedal sensors, as well as vacuum and washer pumps for the company’s Asian- and North American-based OEM customers.
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Housing & Mortgaging
Sociedad Hipotecaria Federal Seeks USD 3.5 Billion From Multilaterals
October 22, 2008
Mexican mortgage development bank Sociedad Hipotecaria Federal (SHF) is negotiating USD 3.5 billion in long-term credit lines with multilateral institutions to support the country’s housing and mortgage industries. SHF said it is negotiating a line with the World Bank (WB) for USD 1 billion and another one with the Inter-American Development Bank (IADB) for USD 2.5 billion. SHF expects to have the credit lines approved in November.
Infonavit Sells MXN 3.65 Billion In Mortgage Bonds
October 23, 2008
Mexico’s federal housing fund Infonavit said it sold about MXN 3.65 billion in mortgage-backed securities through a private placement. Infonavit said the securities, known as Cedevis, were denominated in inflation-indexed investment units, (UDIs), and sold in two series, one for MXN 1.95 billion and the other for MXN 1.70 billion. The placement was the first mortgage-bond issuance since September 4, when HSBC Mexico sold MXN1.5 billion.
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Construction & Infrastructure
Oapas To Build Two Wastewater Treatment Plants In Naucalpan
October 24, 2008
Oapas, the water and sewerage utility of the Naucalpan municipality, in Mexico (Edomex), announced it will build two wastewater treatment plants to address the contamination in its rivers and streams. The first plant, in Rio Hondo River, will have a 50l/s capacity and is expected to take 12 months to build. The second wastewater treatment plant will be located on the Chico de Los Remedios River. It will also have a minimum 50l/s capacity. In addition, Edomex said it is investing over MXN 4 billion this year to improve and expand potable water coverage in urban and rural areas.
Cemex Places MXN 500 Million In Short-Term Debt
October 22, 2008
Mexican cement giant Cemex placed MXN 500 million in short-term debt on the local market. Cemex said it placed MXN 500 million in 28-day paper at an average annual interest rate of 10.72%. Liquidity in the local debt market has dried up in recent weeks as a result of risk aversion brought on by the global financial crisis, and the government is launching a MXN 50 billion program of partial loan guarantees to help corporations roll over short-term debt maturing in the fourth quarter.
SCT Announces Upcoming Tenders For Projects At Mazatlan And Other Ports
October 20, 2008
The Communications and Transport Ministry (SCT) announced upcoming tenders for modernization works at the ports of Mazatlan, Manzanillo, Guaymas and Lazaro Cardenas, in the states of Sinaloa, Colima, Sonora and Michoacan, respectively. The construction of a multipurpose terminal in Mazatlan will be put to tender, as well as containers terminals in Manzanillo, Guaymas and Lazaro Cardenas. A tender will also be issued for an automobile handling terminal in Lazaro Cardenas.
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Retail
Wal-Mart Plans To Invest USD 22 Million In Coahuila
October 22, 2008
U.S. retailer Wal-Mart said that it has plans to invest USD 22 million in a new facility in the state of Coahuila, and that it will create approximately 1,000 jobs. Wal-Mart said that it is currently at the topographic works stage and that construction is expected to begin in upcoming weeks. The investment is to open an Aurrera store and a mall that is expected to feature theatres and other services.
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Telecommunications & Technology
Telmex 3Q Net Profit Falls 28% To MXN 5.44 Billion
October 21, 2008
Telmex reported a 28% drop in 3Q net profit due to weak sales and higher debt financing costs. Net profit from continuing operations was MXN 5.44 billion, compared with MXN 7.56 billion in the third quarter of 2007. Meanwhile, Telmex Internacional (Telint) posted a 40.1% decline in 3Q net profit as foreign exchange costs rose. Telint said its net profit for the July-September period was MXN 1.156 billion. Revenue grew 14.4% to MXN 19.573 billion and core EBITDA edged up 1.7% to MXN 4.842 billion.
Telmex Raises 2008 Capex Outlook On Broadband Boom
October 22, 2008
Telmex has raised its guidance for 2008 capital expenditures to between USD 850 million and USD 900 million from USD 550 million thanks to higher than expected demand in its fast growing broadband business. Officials at the company said that with its core long-distance and local telephony businesses in decline, Telmex sees broadband and eventually pay-TV as its main growth markets going forward. The number of broadband accounts rose 63% year-on-year to nearly 4.4 million at the end of September. Meanwhile, Telmex Internacional (Telint) said capital expenditures for this year will exceed its original budget, reaching USD 1.45 billion.
America Movil Seeks To Provide Mobile TV Services In Colombia
October 21, 2008
Mexican mobile telephony provider America Movil is continuing its search for new markets in Latin America and has disclosed plans to provide mobile TV services in Colombia through its local Comcel subsidiary. Comcel has requested a new license from Colombia’s National Television Commission (CNTV) to offer mobile TV services through its mobile telephony network. America Movil, which has 24.1 million clients in Colombia, already provides mobile TV services in Mexico.
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Media & Entertainment
Televisa Says 3Q Profits Fell 9.6%
October 23, 2008
Mexican media conglomerate Grupo Televisa said profits fell 9.6% in 3Q as financing and other costs rose. Televisa said net income fell to MXN 2.1 billion at the end of the quarter, from MXN 2.3 billion in the same period last year. The company said its profits were hurt by a MXN 560 million interest payment it made during the quarter. Net sales grew 21% to MXN 12.5 billion led by a 229% increase in sales at its paid television service Cablevision.
Televisa Extends Agreement With Telemundo To Include Digital Platforms
October 21, 2008
Mexican media conglomerate Grupo Televisa said it has extended its content distribution agreement with U.S. Spanish-language network Telemundo Communications Group, owned by NBC–Universal, to include digital platforms. Original content from Telemundo will be distributed through Televisa websites and mobile services. The agreement also includes derivative products such as downloads of images and ringtones and text messaging based on Telemundo content. Financial terms were not disclosed.
PRD Party’s Channel Begins Broadcasting
October 20, 2008
Leftist opposition Democratic Revolution Party’s (PRD) president Guadalupe Acosta has inaugurated his party’s TV channel “TVSol” broadcasting activities by transmitting information on the agreements reached with the ruling National Action Party (PAN) and opposition Institutional Revolutionary Party (PRI) on the oil sector reform. Acosta Naranjo said that TVSol will keep PRD’s members, followers and the party’s state directions well informed on the party’s activities.
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Hospitality & Tourism
Tourism Sector Predicts Growth Despite Global Crisis
October 22, 2008
The National Tourism Confederation of Mexico (CNT) said that it expects foreign tourism in the country to grow in the remaining months of 2008 and during all of 2009 despite the global economic crisis. CNT said that Mexico will welcome 22.1 million tourists from abroad in 2008, 3.3% more than last year, and in 2009 it will experience a 3.6% increase. CNT calculated that income from tourism this year will total USD 13.53 billion, 4.9% more than in 2007, while that figure will rise next year to USD 14.5 billion. CNT estimates that the number of domestic travelers will increase by 2% and exceed 59 million, of whom it calculates that about 63% will be traveling for business.
GHI To Continue Investing In Mexico Despite Global Crisis
October 21, 2008
According to U.S. hospitality firm Global Hospitality Investments’ (GHI) CEO, the firm will continue with its planned investments program in Mexico’s hotel sector regardless of the global financial crisis. GHI has entailed over USD 1 billion to invest in Mexico to broaden some hotel’s services by adding golf courses, tennis courts and by opening new hotels. GHI also plans to invest in the Riviera Maya, Los Cabos resort, and in Mexico City.
Airport Group Asur To Develop Land For Tourism
October 21, 2008
Mexican airport operator Grupo Aeroportuario del Sureste (Asur) said it invested USD 22 million to buy land for development at the Pacific tourist destination of Huatulco, in the state of Oaxaca. Asur purchased 130 hectares of land from Mexico’s National Tourism Fund (Fonatur) through a public auction. As the winner of the auction, the company must build 1,300 hotel rooms on the property in the next four years.
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Economy
Banxico Sells USD 1 Billion To Back Peso
October 23, 2008
The Central Bank (Banxico) sold USD 1 billion at an auction in a bid to back the battered peso (MXN). Banxico has been selling dollars in foreign reserves to keep propping up the peso, as it has lost around a quarter of its value since early August. Banxico has sold USD 13 billion for pesos since October 8.
Mexico Stocks Hit 27-Month Low On Recession Fears, BMV To Meet Goal
October 22, 2008
Mexican stocks plunged to a 27-month low, weighed down by losses in shares of cell phone operator America Movil and on mounting worries the U.S. slowdown would drag Mexico into a recession. The benchmark IPC stock index fell 7.07% to 18,774 points, its lowest since July 2006. Shares in America Movil, the heaviest weighted stock on the index, tumbled 11.21% to MXN 19.40. However, Mexico’s Stock Exchange (BMV) still expects to reach its net profit goal of MXN 406 million this year. BMV reported 3Q net profit of MXN 177.6 million and MXN 300.4 million net for the January-September period.
Mexico Annual Inflation Hits 5.7% In Early October
October 23, 2008
Mexico’s 12-month inflation rose to 5.70% in early October due to higher energy prices, keeping it difficult for the Central Bank (Banxico) to cut interest rates to bolster growth. Consumer prices in the first two weeks of October rose 0.49%. Core inflation in the first half of October was 0.15%. Banxico said that higher prices for electricity, gasoline and domestic gas helped push inflation in early October.
Mexico’s Poverty Rate Among OECD’s Highest Despite Decrease
October 22, 2008
According to a report published by the Organization for Economic Cooperation and Development (OECD), Mexico’s poverty rate has dropped from 21% to 18.5% over the past 10 years. OECD considers as poor those earning less than 50% of the country’s average income. Nevertheless, Mexico’s poverty rate is amongst the organization’s highest, being 1.5 times higher than the average rate of OECD’s member states.
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Border & Migration
Cuba, Mexico Sign Agreement To Repatriate Undocumented Migrants
October 20, 2008
Mexico and Cuba agreed to repatriate immigrants of each country who illegally enter the other. The accord aims “to guarantee a legal, orderly and secure immigration flow between both countries." The accord also calls for cooperation and exchange of information on immigration through a binational working group. Up to now, Cuba took back illegal emigrants detained on the high seas, but it refused to accept Cubans detained on Mexican soil, almost all of them en route to the U.S. The governments of both countries blamed the U.S. for incentivizing illegal immigration. Several groups among the Miami Cuban exile community expressed disagreement with the pact.
Detroit’s Latino Population Doubled From 1990 To 2007
October 20, 2008
According to experts, Detroit’s Latino population has doubled from 1990 to 2007 and now represents 6% of the city. Experts say that the phenomenon is due to a kinder social climate for Mexicans, where they are not seen primarily through the prism of race and conquest, but as just one more set of Catholic, working-class immigrants.
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Politics
Cuban Foreign Minister Emphasizes Advance In Relations With Mexico
October 20, 2008
Cuba’s Foreign Minister Felipe Perez Roque said during an official visit that Havana’s relations with Mexico have been reestablished and “are advancing in a satisfactory manner." Perez Roque’s Mexican counterpart, Patricia Espinosa, traveled to Cuba six months ago in an earlier gesture of rapprochement. Bilateral ties went into the deep freeze during the 2000-2006 government of President Vicente Fox, who asked Fidel Castro to cut short his visit to a 2002 U.N. conference in the northern city of Monterrey to ensure that the Cuban leader would not cross paths with U.S. President Bush.
IFE: PAN To Obtain More Resources Than Opposition Parties For 2009 Activities
October 20, 2008
According to the Federal Electoral Institute’s (IFE) estimates financing political parties will be granted in 2009 for ordinary political activities and the mid-term Congressional elections, the ruling National Action Party will receive more public resources for its operations and campaign expenditures. IFE estimated that PAN’s funds will surpass MXN 1 billion, or five times more than the Social-Democrat Party, which is expected to obtain less money than other parties with only MXN 205 million.
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Justice, Safety & Crime
Condoleezza Rice Visits Mexico To Address Security Concerns
October 23, 2008
U.S. Secretary of State Condoleezza Rice visited Mexico for two days and met with local counterpart Patricia Espinoza to discuss ways to improve cross-border cooperation in the battle against the country’s powerful drug cartels. Rice said during the meeting that Mexico should soon have a USD 400 million U.S. aid package to help fight drug cartels and announced that Mexican and U.S. officials will meet next month in Washington to move forward on implementing the Merida Initiative on drug war cooperation.
Police Arrest Eduardo Arellano Felix, Leader Of The Tijuana Drug Cartel
October 26, 2008
Authorities have arrested Eduardo “the doctor” Arellano Felix, a leader of the Tijuana drug cartel and one of the international traffickers most sought by the U.S., after a shootout in the city of Tijuana. Eduardo Arellano Felix ran the cartel with his sister Enedina, the only main suspect from the family who remains at large after several brothers were arrested or killed. Arellano Felix’s 11-year-old daughter was in the house where he was arrested and where she lived under a false name. She was unharmed.
Authorities Nab “El Rey” Zambada Top Operative For The Sinaloa Drug Cartel
October 22, 2008
Attorney General Eduardo Medina Mora announced that authorities have arrested Jesus “El Rey” (“The King”) Zambada, a top operative for the Sinaloa drug cartel, in a shootout in Mexico City (DF). Zambada directed cocaine and methamphetamine trafficking through Mexico City’s International Airport (AICM) and was among 16 Sinaloa cartel members arrested in a DF neighborhood.
Soldiers Beheaded In Northern Mexico
October 23, 2008
Authorities reported that 10 soldiers have been beheaded in the state of Nuevo Leon over the past weeks. Police in Santiago, a town near the state’s capital city of Monterrey said that the bodies were in an "advanced state of decomposition." Nuevo Leon officials said that in addition to the decapitated soldiers, four were stabbed to death. In a separate incident, police in the state of Chihuahua received four severed heads in coolers. The heads are believed to belong to drug cartel operatives.
State Of Morelos’ Prosecutor, Bodyguards Slain
October 24, 2008
Authorities said that suspected killers-for-hire murdered the head of the organized crime unit in the Attorney General’s Office of the state of Morelos and his two bodyguards. Assailants traveling in two SUVs intercepted prosecutor Andres Dimitriadis in his vehicle on a street in Cuernavaca, the state capital, and fired at least 110 shots, killing the official and escorts Mario Ovalle and Jaime Guzman. Authorities said the preliminary investigation indicated the murder was ordered by either of two feuding drug cartels.
Officials: 21 Dead In Mexico Prison Riot
October 20, 2008
Twenty-one prisoners died in a fight between inmates at a prison in Reynosa, in the state of Tamaulipas, across the border from McAllen, Texas. In addition, the Public Security Ministry of the state of Tamaulipas said that the pre-dawn confrontation between the two groups of inmates left 12 prisoners injured. The cause of the riot and the inmates’ deaths is under investigation, as well as the prison director and guards who were suspended.
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Health & Science
Novartis Considers Focusing On Chronic-Degenerative Diseases
October 20, 2008
Multinational pharmaceutical company Novartis is focusing its market strategies on medicines to treat chronic-degenerative diseases, a market niche made mostly of the elderly. An executive from Novartis’ Mexican subsidiary said that the chronic-degenerative diseases market will grow as the average life expectancy in the world is grows faster and diseases such as Alzheimer become more common among Mexicans.
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Other
Floods leave 34,500 Homeless In Tabasco
October 22, 2008
Authorities have reported that the Usumacinta River, snaking through the state of Tabasco, overflowed after heavy rains continued to fall and drove 34,500 people out of their homes. The Civil Protection Office of Tabasco said that the flood, triggered by heavy rains in the nearby state of Chiapas and in Guatemala, has damaged houses and ravaged farmlands in four municipalities and 165 rural communities in the area, affecting more than 100,000 inhabitants.
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