Market Overview

Uncertainty Around NAFTA Impacts Mexican Financial Portfolios


Uncertainty Around NAFTA Impacts Mexican Financial Portfolios

Bloomberg announces results of 2018 Buyside Forum Survey

PR Newswire

NEW YORK and MEXICO CITY, Aug. 22, 2018 /PRNewswire/ -- The uncertainty around the North American Free Trade Agreement (NAFTA) is the biggest factor affecting Mexican investment portfolios -- more than its new president -- according to the results of a Bloomberg survey issued today.

Bloomberg (PRNewsfoto/Bloomberg)

More than 100 chief investment officers, chief operating officers, investment analysts, and portfolio managers participated in the Bloomberg 2018 Buyside Forum on Wednesday in Mexico City. Top financial and technology challenges were discussed at the event sponsored by Bloomberg's financial products and services business.

When asked which factor they expect will most affect the portfolios they manage over the next 12 months:
* 47 percent of those who responded said it would be NAFTA renegotiations,
* 38 percent said it would be the global economy, and
* only 14 percent said it would be the new administration of Mexican President-elect Andres Manuel Lopez Obrador, which is set to take office in early December.

The business and financial executives also discussed the latest innovations in electronic execution. When asked how much of their trading is done electronically, the majority of those who responded, or 57 percent, said that more than two-thirds of their trading is done over technology platforms, but another 23 percent said that they are not using any electronic trading for their financial transactions.

"Electronic trading is used by leading buyside investment professionals globally to achieve best execution and ensure transparency," said Mariana Suárez, Bloomberg's Head of Sales for Mexico and Central America. "We can help firms adopt e-trading, so they can lower their costs, meet compliance regulations and complete transactions faster and more efficiently. E-trading is crucial to enhancing Mexico's connections within the Latin America region and the world's financial markets."

Attendees participated in a workshop on how to manage the risks and opportunities of the flattening yield curve in Mexico.  The development has created uncertainty in the Mexican marketplace and the need for faster technology to monitor the positions in their portfolios.   

When asked which technology challenge will be their priority going forward, close to half  (47 percent) of those who responded said they would be investing in new tools to analyze portfolio risk, another 37 percent said they would be making compliance the priority, another 12 percent said order and execution management, while only four percent said they would be spending on post-trade matching, settlement and reconciliation.

The Buyside event featured a panel on Mexico's consumer outlook, featuring Bloomberg Intelligence analyst Julie Chariell, who provides research on consumer products in Latin America.

When asked which e-retailer they buy from most often -- the response was overwhelming with 72 percent of respondents naming Amazon México as their top online site.
The audience rated other e-retailers much lower with 12 percent saying that Mercadolibre was their go-to site, eight percent saying Liverpool, seven percent used Walmart most and only one percent bought most on Linio.

The Bloomberg 2018 Mexico Buyside Forum also featured discussions on how to position portfolios correctly with the effects of the flattening yield curve and obtain more details on attribution and returns. Attendees also learned how to meet best execution standards with Bloomberg Transaction Cost Analytics (BTCA) and address compliance and risk requirements with Bloomberg Vault.  

About Bloomberg
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