Mexico Bonds May Extend Rally as Oil Prices Gain, Rating Rises
Mexico’s U.S. dollar-denominated bonds may extend a 3 1/2-month rally as the country benefits from record oil prices and improving credit quality.
“We’re more optimistic on Mexico relative to the market as a whole,'’ said Christian Stracke, an emerging-market debt strategist at New York-based CreditSights Inc. “The emerging- markets sector as a whole is overbought and we’ve seen it starting to pull back a bit. As the market pulls back, safer credits like Mexico tend to outperform.'’
Record oil prices helped Mexico, the world’s fifth-largest oil producer, boost international reserves by 16 percent in the past two years to $62 billion. Higher reserves and President Vicente Fox’s efforts to pay down dollar debt led Moody’s Investors Service in January to raise the country’s foreign- currency debt rating to Baa1, the third-lowest investment grade. Standard & Poor’s also rates Mexico investment grade at BBB.
More: bloomberg.com
Sept. 2 (Bloomberg) -- Canadian natural-gas prices, which reached the highest in almost 30 months on Aug. 31, fell for the second day in three as U.S. Gulf of Mexico production shut by Hurricane Katrina started to return.
About 7.2 billion cubic feet of gas production was shuttered in the Gulf as of 12:30 p.m. New York time, the U.S. Minerals Management Service said. About 8.8 billion in production was cut immediately after Katrina hit.
``Some of the hurricane hype is starting to come off, although prices will probably remain strong.'' said Martin King, an analyst with FirstEnergy Capital Corp.
Mexico Bolsa Rises on Economy, Led by Corp. Geo: Latin Stocks
Mexican stocks rose and headed for a fifth straight weekly gain, led by homebuilder Corporacion GEO SA, as the government reported that the economy expanded faster than economists estimated in the third quarter.
The Bolsa index of the most-traded stocks in Mexico City rose 90.05, or 0.6 percent, to 16,545.44, a record. The index gained 2.5 percent for the week. Elsewhere in Latin America, Brazil's Bovespa was little changed today, rising 15.37, or less than 0.1 percent, to 31,102.37, for a 2 percent gain in the week.
The Bolsa
Mexico's Bolsa Has Third-Straight Yearly Gain: Latin Stocks
Mexico's Bolsa fell on the last trading day of 2005 as the index approached its third straight annual gain.
America Movil SA, up 60 percent this year, and Cemex SA, up 55.9 percent, led declines today as investors sold to take advantage of the rally.
The Bolsa fell 130.58, or 0.7 percent, to 17,702.22. The drop follows a year-end rally that began on Dec. 9, the day Mexico's central bank cut its benchmark lending rate more than expected to 8.25 percent. The cut followed a government report that showed the annual inflation rate
Emerging debt-Prices rally on Treasuries; Mexico leads
Emerging market debt prices rallied on Friday, boosted by U.S. Treasuries and led by Mexico, where the government announced its second step this week to reduce its outstanding foreign debt.
Mexican external bonds, which usually move in relatively narrow ranges compared with other major EM credits, roared higher. The benchmark global bond due in 203, jumped 2.500 points to bid 124.50 and the global 2019 rose 4.250 to bid 123.750.
Analysts said the surge was driven by the view that debt will become more valuable as it dwindles in supply.
"It was a Mexico colored day," said
Brazil reverses course to close higher; Mexico rises
Brazilian equities finished higher Monday as investors took advantage of prices declines earlier in the session, and Mexican stocks were supported by a rally in U.S. markets as investors focused on a drop in oil prices.
In Sao Paulo, the Bovespa rose 174 points, or 0.5%, to close at 34,972.74.
Brazilian shares lost ground earlier in the session, reacting negatively to a sell-off in the currency, said Ricardo Amorim, head of Latin American strategy at WestLB.
The real hit 2.2377 against the U.S. earlier in the day, its lowest level since June 28,
GLOBAL MARKETS-Safe haven assets rally on quake off Mexico coast
Reports of an earthquake in Mexico's Gulf of California boosted demand for safe-haven government bonds on Wednesday, lifting U.S, euro zone bond futures and the Swiss franc sharply higher.
The Gulf of California is a body of water that separates the Baja California Peninsula from the northern Mexican mainland.
March Bund futures hit a session high of 121.97 coming within a whisker of a nine-week peak as news filtered through the markets boosting demand for risk-free assets.
"There's talk of an earthquake in the Gulf of California. This is pushing bonds up," said David
Bond Strategists: Julius Baer's Owens Says Sell Mexico on Rally
Investors should sell Mexican government bonds because their prices already reflect chances the central bank will cut interest rates twice more this year, said Adrian Owens, a director of fixed income at Bank Julius Baer.
``The inflation outlook for Mexico is encouraging and the central bank will continue to cut interest rates, but most of that good news is already priced into the market,'' Owens, who co- manages the firm's $157 million Global Rates hedge fund, said in a Sept. 29 interview. ``The best bet is to trim your Mexican
Mexico breaks five-day losing streak; Brazil rises
Major markets in the Latin America closed higher Tuesday, boosted by a robust recovery in U.S. stocks that was fueled by falling oil prices.
Crude oil prices, which had strengthened on reports of an attack on the U.S. Embassy in Syria, fell below $64 a barrel as demand forecasts were revised lower.
In Mexico stocks broke a five-day losing streak. The key IPC index surged 489.88 points, or 2.4%, to 21,102.77.
More : marketwatch.com
Mexico global bonds jump on exchange warrant plan
Prices on longer-maturity Mexican global dollar bonds soared on Thursday as the government announced it was offering warrants allowing holders to exchange them for domestic peso-denominated paper.
"Mexico has just announced an offering of three series of warrants that would allow their holders to exchange a specified face amount of external bonds for an amount fixed in U.S. dollars of a peso-denominated Bono on the expiration date," Barclays Capital said in a research note.
"It's going ahead today," a spokeswoman at Mexico's finance ministry said when asked if the warrants would be offered on Thursday
Mexico Sells Warrants to Swap $2.5 Billion of Bonds
Mexico sold securities that allow investors to swap about $2.5 billion of the nation's dollar- denominated bonds for peso debt next year, a person familiar with the offering said.
Investors paid $65 million for warrants that can be turned in along with Mexican dollar bonds that mature between 2007 and 2033 in exchange for peso securities due in 2011, 2014 and 2024, the person said.
The sale is part of a government effort to shift more of its financing to the domestic market, helping reduce its vulnerability to declines in the
