Bolsa Climbs to Record on Renewed NAFTA Hope

Renewed hope that the North American Free Trade Agreement will be approved set off frenzied trading and contributed to a record high close for the Mexican stock exchange Wednesday.

Optimism about the trade pact was helped by a belief that Vice President Al Gore was more convincing than NAFTA opponent Ross Perot in Tuesday night’s televised debate, analysts here said.

The main index on the Mexican stock exchange, the Bolsa Mexicana de Valores, rose 4.17% and the dollar fell more than 2% against the peso, indicating more confidence in the Mexican economy and reflecting higher Mexican interest rates.

“It’s going up because of hopes that the agreement will be approved,” David Cohen of the Casa de Bolsa Inverlat trading house said of the stock market climb. “After last night, we no longer consider Ross Perot a threat.”

Published reports that the Mexican central bank has sold $3 billion to $4 billion to bolster the peso in recent days contributed to the stock market climb, analysts said.

The Bolsa index, which has been measuring the performance of Mexican stock issues since 1978, finished at 2,035.33, up 81.49 points from Tuesday. The Bolsa’s previous record of 2,029.06 was set last month.

The dollar, which rose about 4% against the peso Tuesday, fell nearly 2% on Wednesday to finish at 3.21 pesos.

The government also lifted short-term interest rates, hoping to attract more investment to peso-denominated securities. It’s a move that typically helps a country’s currency.

Mexican officials rallied behind Gore, proclaiming him the winner of the debate with Perot. Anger at Perot’s suggestions that all Mexicans live in poverty soon gave way to a perception that the Texas tycoon had been put in his place.

NAFTA faces a tough fight in Congress, where some lawmakers say it will cost U.S. jobs and increase border pollution.