Mexican Election Results Spark Market Jitters, Peso Decline
By THÉRÈSE MARGOLIS
It will take months, or even years, before Mexico sees the long-term economic consequences of its people’s passionate landslide vote to elect leftist populist Andrés Manuel López Obrador (AMLO) as their president on Sunday, July 1.
But while there will no doubt be significant economic ups and downs in the months ahead, the Mexican Bolsa de Valores (stock market) already felt a heavy blow, just hours after the National Electoral Institute announced the 64-year-old former mayor of Mexico City’s victory.
Jittery investors and multinational corporations with concerns about their investment holdings in the country registered their uncertainty about AMLO’s seemingly contradictory economic policies and Mexico’s increasingly frosty relationship with the United States by assuming a bearish approach Monday, July 2, to the Bolsa Mexicana de Valores (BMV), the chief indicator of the country’s stock exchange.
In morning trading, the Bolsa dropped below the crucial 47,000 point line, to 46,991.80 , representing a 1.41 percent plunge compared to closing on Friday, June 29, when it was at 47,663.20 points.
The drop particularly affected the stock of Grupo México Transportes, which fell 4.31 percent to 27.747 pesos per share and the Mexican mining consortium Peñoles, which suffered a 4.22 percent decline in share value.
Notwithstanding, there were some winners at the BMV Monday, including the airport groups ASUR and OMA, whose shares were trading .73 percent and .34 percent higher respectively compared to their worth on Friday,
Meanwhile, the Mexican peso had dropped steadily from 19.68 to the U.S. dollar at the close of Friday and was tottering at 20.05 to the dollar by midday Monday.
Many international economic analysts are predicting a further decline in the peso’s value by weeks end.