Five emerging market views on Mexican elections
By Jessica Tasman-Jones, 28 Jun 18
Mexico is set to lurch to the left when it goes to the polls this weekend with populist Andrés Manuel López Obrador, known by his nickname Amlo, the front runner in the presidential elections. Five managers weigh in on what Mexico’s politics mean for emerging market investors.
“The uncertainty for Mexico is unwelcome, especially in addition to questions about how Nafta might look in the future. From our perspective, we are reviewing how resilient our holdings can look in an environment of populism as it seems an Andres Manuel Lopez Obrador victory is priced in. We are also looking out for opportunities where volatility around the election may allow us to build a position in an attractive longer-term investment horizon.
“And this is the key message; on a shorter-term time frame, we can expect some significant volatility, not least in currency values, but longer-term, Mexico continues to boast some very high quality franchises, and any significant pull back in valuation could be seen as an entry point, assuming some continuity in government policy.”