AFTERMATH OF AN ASSASSINATION : Colosio Slaying Casts a Shadow : Latin America: Murder of leading presidential candidate raises questions about the economic future of Mexico. Still, many U.S. executives remain confident in nation.

The assassination of leading Mexican presidential candidate Luis Donaldo Colosio raises questions about the country’s economic future and threatens to stem the flow of new investment needed to continue Mexico’s economic reforms, at least in the short term.

But executives of U.S. businesses that have already invested heavily in Mexico--as well as officials of the Clinton Administration, which has staked considerable prestige on the success of the North American Free Trade Agreement--expressed confidence in the underlying strength of Mexico’s economy.

Uncertainty prevailed in the wake of the shooting, which came on the heels of a January uprising in the southern state of Chiapas and the kidnaping of a prominent Mexican banker.

Colosio, the handpicked successor to President Carlos Salinas de Gortari, was an important symbol of continuity for foreign investors.

Now, the main question is, who will replace Colosio: someone likely to continue the economic policies of Salinas, or a more populist candidate who would be less amenable to foreigners?

The other key question: Was the shooting the random act of a madman or the latest act in a systematic rebellion against Mexico’s status quo? The latter raises the specter of political upheaval, which would tend to scare away foreign capital.

Significant investments will probably be delayed until the answers are known, analysts said. And that could be critical to a nation that has staked its economic future on luring foreign investment.

Colosio’s assassination will “slow down economic growth and investments and cause people to stand back and take a deep breath before coming down,” said Tony Ramirez, vice president of Made in Mexico, a Chula Vista-based consultant. “But it won’t stop U.S. investment. There is too much to gain.”

Several U.S. firms--from car makers to banks to toy companies to tour operators--said they would not be deterred from expanding their business in Mexico, which remains a promising market, particularly under NAFTA.

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Luis Maizel, a fund manager and president of LM Capital Management in La Jolla, said he was besieged with phone calls Thursday from worried investors in Mexico--as well as from pension fund managers wondering if this would be a good time to buy Mexican stocks.

The Mexican government “will have to do a lot of bridge repairing to get this off the minds of investors,” Maizel said.

Still, among institutional investors attending a Mexico City conference Thursday, “the feeling was clearly, (the shooting) was an aberration from Mexican history . . . and compared with other countries around the world, it is still a stable environment,” said Raul Hinojosa-Ojeda, a UCLA urban planning professor who addressed the gathering.

Word of the assassination sent shock waves through many of the 2,200 Mexican maquiladoras-- foreign-owned border factories, the vast majority of which are American--as well as other American-owned businesses.

Robert S. Jezak, vice president and general manager of Mattel toy maker’s giant Tijuana maquiladora, said the killing casts a pall over the future of his company’s operations in Mexico as well as those of every other foreign company.

“We feel let down and ashamed because we saw a bright future with NAFTA, and now we see that the internal struggles are beginning to take precedence over the economic growth of the country,” said Jezak, whose 2,000 employees make his factory one of the largest foreign-owned plants in Tijuana.

“If it’s the work of one assassin with a vengeance, then things will settle down. But if it’s a greater story, then people will stay nervous and (the assassination) will begin to have an impact on their lives as well as livelihoods because as the political scene changes in Mexico, the economic scene has always changed with it.”

Still, the killing is not likely to cause any company to close up shop and head back across the border immediately, officials said. U.S. exports to Mexico were $41.6 billion in 1993, the Commerce Department reported.

“It’s a sad turn of events, but for us, at the moment we don’t see any change in our business,” said Donald O’Neal, spokesman for Hughes Space & Communications, a Hughes Aircraft subsidiary that has invested hundreds of millions of dollars in the Mexican communications satellite business in the last decade.

Major American banks planning to open subsidiaries south of the border generally said the assassination would not affect their plans. “It’s seen as a political event, not an economic one,” said a spokesman for Chase Manhattan Corp. “I don’t think our extending credit to Mexico will be affected by this.”

Wednesday’s assassination throws into question the timing of an upgrade to Mexico’s credit rating, crucial to wooing pension funds and other large foreign investment.

But the international credit rating agencies were inclined to take a long view of Mexico’s potential. Moody’s and Duff & Phelps were not disturbing their speculative credit ratings for Mexico’s bonds; they were impressed by what they and international economists called Mexico’s “institutions.”

Moody’s rates Mexico’s debt securities as Ba2 and Duff & Phelps gives Mexico a BBB rating.

“While Duff & Phelps will continue to monitor events closely, Mexico has sufficient international reserves and other tools to weather this shock and keep the long-term economic strategy in place,” said David Roberts, head of international ratings for Duff & Phelps.

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Kristin Lindow of Moody’s said that Mexico’s “weak economy and overvalued peso” would have to be changed in the aftermath of the latest violence. Like many others she saw the government taking action to boost economic activity, even if this were to cause the peso to decline in the coming days.

To help Mexico weather any immediate financial market jitters from the assassination, the United States on Thursday set up a $6-billion credit line, a so-called swap facility.

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