Bolsa Hits Fifth Record Amid Mexico’s Election Exuberance

The Mexican stock exchange soared to its fifth record close in a row Monday following Sunday’s midterm elections, which were relatively free of the fraud allegations that marred past elections.

Despite major victories for opposition parties, investors saw the election as a positive for the market in that it moves Mexico further along toward being a true democracy.

“The most important event of the year is now behind us with no major casualties,” said Gordon Lee, a stock analyst with Deutsche Morgan Grenfell-Mexico.

The main Bolsa stock index in Mexico City closed up 96.70 points, or 2.1%, at a record 4,741.30.

“The fact the parties recognized each other’s victories, and the speed and extent of that recognition, was a very mature response,” Lee said.

Mexicans voted Sunday, and a preliminary count showed Cuauhtemoc Cardenas of the left-wing Party of the Democratic Revolution, or PRD, in a landslide victory in the historic race for mayor of Mexico City.

The Institutional Revolutionary Party, or PRI, was heading to lose its overall majority in the lower house but

was still the largest single party and may have retained at least three states.

“The bourse is still climbing as it has lagged behind other Latin American markets. Now it has decoupled from the elections, we also have lower interest rates in the offing,” said Lars Schonander, analyst at Santander Investment.

Dealers said Mexican blue chips, notably in the financial sector, drove the market. “As there were relatively few postelectoral problems, the outlook for domestic interest rates is downward,” said Enrique Pani, a banking analyst at Deutsche Morgan Grenfell-Mexico.

Bancomer, one of Mexico’s biggest financial groups, shot up 5 cents to close at 56 cents on the Mexican exchange. The group’s shares together accounted for nearly a quarter of all shares traded, on heavy foreign demand.

Telephone giant Telefonos de Mexico, known as Telmex, leaped 9 cents to a record close of $2.60 in Mexican trading. The firm’s New York Stock Exchange-traded shares jumped $2.11 to $51.75, their highest level since the December 1994 peso devaluation.

Among other NYSE-traded shares, construction firm Empresas ICA jumped 75 cents to $17.63 and flour maker Grupo Maseca rose 50 cents to $17.38.

The peso, meanwhile, strengthened to 7.92 to the dollar from 7.95 on Friday.