Economic Optimism Sends Mexican Stocks to Record
Mexican stocks soared Friday to record highs on growing optimism about the country’s economy.
The Bolsa stock index rocketed 130.84 points, or 4.3%, to close at 3,174.85, topping the previous record of 3,113.27 set April 1.
“I think this is the beginning of a rally of quite significant proportions,” said Luis Phillips, Mexico equity strategist for Paribas Capital Markets in New York. Already this year the Bolsa has jumped 14.3%, after gaining 17% in all of 1995.
A speech Thursday night by Treasury Secretary Guillermo Ortiz Martinez, in which he predicted April’s inflation would be less than 3%, set the tone for the rally.
Ortiz also said that the country’s economy might have shrunk at less than the 3% annualized rate originally predicted for the first quarter--perhaps heralding that the economy will stop shrinking and soon begin growing again.
U.S.-traded Mexican shares rallied with their Bolsa counterparts. Phone giant TelMex gained $1.375 to $34.75 on the New York Stock Exchange. But because of Mexico’s severe currency devaluation in 1994, TelMex’s value in dollars remains well below the record high share price of $76.125 set in 1994.
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