MEXICO: WAKE UP TO THE EMERGING MARKET NEXT DOOR
(First published by CNBC)
Have global investors been missing the emerging market right next door?
Since a paper in 2001 focused investors’ attention on the BRICs—Brazil, Russia, India and China—those countries’ stock markets, averaged out, have risen about 400 percent. Meanwhile, the exchange of the emerging market at America’s doorstep has risen more than 650 percent.
And in a time of dizzying capital flows in emerging markets—draining dry on expectations of the U.S. Fed tightening policy, then sloshing in again when Ben Bernanke on Wednesday unexpectedly kept the monetary fire hose blasting—Mexico looks rock solid by comparison.
Andrew Karolyi, director of the Emerging Markets Institute at Cornell University, said such wild volatility and destabilizing speculation is in no one’s interest. “Investors are not flighty by nature,” he said. “They are naturally long-term oriented and seek out countries in which they can have confidence over the long term.”