The Odebrecht scandal could be a game changer for corporate governance in Latin America, with investors demanding more transparency in the way the region does business.
Mexico seems set on becoming a sustainable finance leader, but a lack of information and clear-cut regulations, and an increasingly volatile peso, seem to be holding potential green bond issuers back.
Few currencies have suffered more since the surprise election of Donald Trump last year than the Mexican peso. Trump made Mexico a cornerstone of his electoral campaign and attacked the Central American country on a number of issues ranging from illegal immigration to the renegotiation of the North American Trade Agreement (NAFTA), which put increasing pressure on the country’s currency and drove the country’s Central Bank to take drastic measures. Will the gambit pay off?
As populist politicians and leaders rise to prominence in the developed world, anti-globalist attitudes and protectionism are also entering the economic frame. With Trump casting doubts over the future of NAFTA and Brexit putting a strain on EU's economic integration, Richard Segal, Senior Analyst at Manulife Asset Management, considers some of the practical effects these policies may bring in the coming years.
While it's still a long way off, we believe markets will become increasingly focused on Mexico's July 1st 2018 presidential elections. Of note, in Mexico’s electoral system one need only win a plurality of the vote in a single round.
The notion that no party can walk away from the current Mexico-US confrontation unscathed is quickly gaining prominence among investors, issuers and observers. While investors are starting to move out of their short Mexican positions, analysts are split on what effect a Trump presidency, impending 2018 elections, and a new Central Bank governor will have on the country’s medium term prospects.
Sustainable energy and infrastructure projects across South and Central America are attracting attention from investors, but the outlook is challenged due to a lack of awareness on the ground.
Emerging market debt took a significant hit after the surprising victory of Donald Trump last November, which was followed by a US interest rate hike weeks later. Concern over the President-Elect’s protectionist policies provoked capital outflows and a significant spike in borrowing costs for US-linked EMs, freezing almost US$10bn worth bonds that were supposed to be issued by Latin American corporations at the end of 2016. Those deals have come roaring back.
After several painful weeks in the currency markets, Mexico’s Central Bank decided to step in and prop the peso, which sank to record lows amid fears of US President-elect Donald Trump’s protectionist policies.
Mexico oil giant’s multibillion dollar issuance on the back of rising oil prices follows a joint Trion oil field exploration deal with BHP Billiton and the country’s successful deep-water oil auction. Are we seeing first signs of the country’s economic recovery?
- EM Green Bond issuance to be Unaffected by Trump
- Donald Trump Presidential Win Broadly Negative for Emerging Markets
- EMs set for huge outflows on Trump victory
- VIDEO: Interview with Jack Deino, Director, Emerging Markets Debt, BlackRock
- VIDEO: Interview with José Torón, Deputy Director General, Undersecretary of Electricity, SENER
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