Mexico's stocks set a fresh record close on Friday. The IPC index closed up 0.25 percent at 24,792.89 points, posting its fourth consecutive record closing high after the central bank held a key interest rate steady and issued an upbeat assessment of inflation.
The central bank kept the overnight rate at 7 percent, saying a recent inflation spike was temporary. The bank said inflation will close the year under 4 percent. Steady rates on bonds and low inflation make the stock market more attractive for investors.
Top retailer Wal-Mart de Mexico (Walmex) led the charge, surging 1.28 percent to 40.38 pesos. The company said on Wednesday its new bank will kick-off operations in the second half of 2007. Broadcaster Televisa surged 2.38 percent to 55.54 pesos. Its New York traded shares rose 0.48 percent to $25.13.
Leading fixed-line phone company Telmex rose 1.10 percent to 14.76 pesos after the company's Argentine unit said on Thursday its sees 2006 revenue up 30 percent thanks in part to growth in its corporate clients. Its New York traded shares finished nearly flat at $26.59.
Cellphone operator America Movil provided the biggest drag on the index, shedding 0.61 percent to 24.45 pesos after BBVA Bancomer said its outlook on the company's shares would not change in light of plans to absorb holding company America Telecom. Its New York traded shares lost 1.25 percent to $44.40.
The peso weakened 0.34 percent to 11.0180 per dollar. The peso's value against the dollar has dropped 0.6 percent this week, and has tumbled 2.3 percent so far in November.
Analysts said plans by leftists to block president-elect Felipe Calderon's December 1 inauguration with protests has spooked foreign investors. "The current market in Mexico has been under pressure by nerves about the government transition," said Roberto Galvan, director of Vanguardia Investment, a Mexico City consultancy. Calderon narrowly won a July presidential election over leftist opposition leader Andres Manuel Lopez Obrador, who claims fraud robbed him of victory and promises to oppose Calderon's economic agenda with street protests.
Galvan and other market watchers said the peso's losses also were fuelled by dollar weakness on concerns about central banks diversifying their reserves and the greenback's narrowing yield advantage over other currencies.
Comments
Comments are closed.