AGL 40.05 Increased By ▲ 0.05 (0.13%)
AIRLINK 132.85 Increased By ▲ 3.32 (2.56%)
BOP 6.90 Increased By ▲ 0.22 (3.29%)
CNERGY 4.60 Decreased By ▼ -0.03 (-0.65%)
DCL 8.90 Decreased By ▼ -0.04 (-0.45%)
DFML 42.99 Increased By ▲ 1.30 (3.12%)
DGKC 84.50 Increased By ▲ 0.73 (0.87%)
FCCL 32.85 Increased By ▲ 0.08 (0.24%)
FFBL 76.87 Increased By ▲ 1.40 (1.86%)
FFL 12.13 Increased By ▲ 0.66 (5.75%)
HUBC 110.25 Decreased By ▼ -0.30 (-0.27%)
HUMNL 14.45 Decreased By ▼ -0.11 (-0.76%)
KEL 5.54 Increased By ▲ 0.15 (2.78%)
KOSM 8.33 Decreased By ▼ -0.07 (-0.83%)
MLCF 39.55 Decreased By ▼ -0.24 (-0.6%)
NBP 66.32 Increased By ▲ 6.03 (10%)
OGDC 199.00 Decreased By ▼ -0.66 (-0.33%)
PAEL 26.30 Decreased By ▼ -0.35 (-1.31%)
PIBTL 7.63 Decreased By ▼ -0.03 (-0.39%)
PPL 159.30 Increased By ▲ 1.38 (0.87%)
PRL 26.24 Decreased By ▼ -0.49 (-1.83%)
PTC 18.45 Decreased By ▼ -0.01 (-0.05%)
SEARL 81.70 Decreased By ▼ -0.74 (-0.9%)
TELE 8.12 Decreased By ▼ -0.19 (-2.29%)
TOMCL 34.40 Decreased By ▼ -0.11 (-0.32%)
TPLP 8.94 Decreased By ▼ -0.12 (-1.32%)
TREET 16.88 Decreased By ▼ -0.59 (-3.38%)
TRG 59.40 Decreased By ▼ -1.92 (-3.13%)
UNITY 27.65 Increased By ▲ 0.22 (0.8%)
WTL 1.40 Increased By ▲ 0.02 (1.45%)
BR100 10,613 Increased By 206 (1.98%)
BR30 31,863 Increased By 149.7 (0.47%)
KSE100 99,019 Increased By 1690.3 (1.74%)
KSE30 30,814 Increased By 621.2 (2.06%)

Mexico will inject $3.9 billion into ailing state oil company Pemex, officials said on Friday, promising to strengthen its finances and prevent a further credit downgrade, although investors saw the plan as only a short-term fix.
Falling oil output, corruption and high labor costs have contributed to the decline of the company that was once a symbol of national pride. It now holds roughly $106 billion in financial debt, the highest of any national oil company in Latin America. Fitch and Moody's rate its credit one notch above junk.
Fitch said on Friday that the plan, which includes additional tax cuts, more government spending on the company and debt refinancing, would likely not be enough to prevent "continued deterioration" in Pemex's credit quality. The agency cited an ongoing "significant level of underinvestment" for Pemex.
Pemex will receive $1.8 billion in pension liability monetization as part of the new plan and finances will be helped by a corruption clampdown, officials said in a presentation that was short on details. They vowed the Mexican government will not take on new debt in 2019. Pemex must make more than $27 billion in debt payments over the next three years.
Investors said they had expected stronger measures, and while encouraged by government vows of support, they said the plan offered only short-term relief. "The measures are not a long term fix and won't be enough to stabilize oil output," said Edward Glossop, Latin America economist at Capital Economics. If oil prices and output decline further, he estimated yields on Pemex bonds could rise by around 1 percent this year.
The price fell after the announcement for Pemex's most heavily traded bond on Friday, maturing in 2047, as its yield rose 14 basis points, according to MarketAxess data. The price on a Pemex bond maturing in 2024 also dropped, with its yield up 32 basis points, reflecting bondholder skepticism of the plan.
What's more, the measures will do little to shore up Pemex's standing with the ratings agencies, said Julie Murphy, a Latin America analyst at JP Morgan. "We are extremely disappointed with the measures," she said. The Mexican peso weakened by more than half a percent against the dollar after the announcement, before recovering later on Friday.

Copyright Reuters, 2019

Comments

Comments are closed.