Optimism for U.S. Investment in Mexico, but Caution is Key
05:00 16/10/2024 - PesoMXN.com
The confirmation of investments from U.S. companies in Mexico has sparked a debate among analysts. Some view this as good news, while others prefer to remain cautious until capital flow is actually observed. These resources will be directed to crucial sectors for the national economy: tourism, energy, infrastructure, and technology, which are essential for the country’s development.
Although expectations are encouraging, not everyone shares this optimism. This information was revealed during the CEO Dialogue, where the Mexican government, led by President Claudia Sheinbaum and Secretary of Economy Marcelo Ebrard, met with local and international business leaders in Mexico City. “Investments will be made in sectors where the new government is open to active participation from the private sector,” commented Marco Antonio Montañez Torres, director of analysis and investment strategy at Vector Casa de Bolsa. Humberto Calzada, chief economist at Rankia Latin America, stated that Pemex's openness to joint investments could bring benefits to the economy. Banco Base also expressed that these announcements are very positive, generating optimism and expectations for job creation, which could boost economic growth in the country.
Investments are projected to exceed $20 billion in sectors considered fertile for Mexico: energy, tourism, infrastructure, and technology. “Royal Caribbean has seen significant growth over the last two years, hitting historic highs in the stock market,” noted Calzada, emphasizing that it’s positive for major companies to want to invest here. In the energy sector, Montañez Torres added that Mexico presents itself as an attractive destination for these companies, especially given the country’s energy needs for future development. Royal Caribbean plans to invest $1.5 billion in Quintana Roo and has a market capitalization of $52.11 billion, while Woodside Energy, noted as a significant U.S. company, has a valuation of $32 billion.
“If the initiatives materialize and revenues start to flow in, it could be the right time to buy shares, as Woodside has an attractive valuation of $16 per share and could reach figures around $26,” added Calzada. On the other hand, Amazon, one of the giants of Wall Street, has reached a market value of over $2 trillion this year. While it’s important to maintain an open dialogue between the government, corporations, and society, some prefer to be cautious. José Domingo Figueroa Palacios, president of the Mexican Institute of Finance Executives (IMEF), warned that although announcements about potential investments are made, uncertainty in the environment—stemming from judicial reforms and the gradual elimination of autonomous bodies—could continue to limit capital inflow: “As long as insecurity prevails, investors will remain reserved,” concluded Figueroa. Víctor Manuel Herrera Espinosa, from the same institute, agreed that the promises of investment cannot be considered concrete until new capital truly starts to flow.
In summary, while an interesting opportunity for economic growth presents itself, the reality is that a cautious approach is necessary. True investor confidence will only be achieved by ensuring a safe and stable environment, where reforms and policies are clear and consistent. The key will be how these aspects are managed in the coming months.
