Mexico’s exchange traded fund (ETF) iShares MSCI Mexico Index (EWW) has been trending upward lately. Currently, it’s up 21.9% year-to-date.
One of the factors behind EWW’s rise is Mexico’s Bolsa index’s rise to a new high on Thursday. The Bolsa Index was recovering from August’s worldwide selloff, as confidence in earnings and economic growth was bolstered by an upgrade of the country’s credit rating earlier this week, reports William Freebairn and Paulo Winterstein for Bloomberg. The index increased 1.8% partly thanks to America Movil SAB’s announcement of a special dividend. Mexico’s credit rating was raised to a BBB+ from the Standard & Poor’s Ratings Services. The upgrade was because tax legislation last month seemed to boost the economy. Also, Wal-Mart de Mexico SAB, the nation’s largest retailer, reported better-than-expected third-quarter results earlier this week, which seems to have sparked a rally in retailers.
Mexican stocks took longer than those in Brazil and the U.S.
to recover from a global rout in August on credit market concerns. However, now that they’re back up, we’ll have to watch and see if EWW’s run will continue.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.