Mexico: Latin America's best-kept secret?

LATIN AMERICA

Unbeknown to most, the Mexican market has outperformed the rest of Latin America and wider emerging markets for the past two years. Tom Smith, manager of the Neptune Latin America fund, explains the core drivers of this overlooked market.

GDP acceleration While many emerging markets are seeing GDP growth decelerate in 2014, Mexico should see a material acceleration, which will help drive earnings growth. President Enrique Peña Nieto’s government announced its ambitious National Infrastructure Plan last summer, with $300bn of planned spending over the 2013-2018 term, 43% higher than the previous administration. Public spending was low in 2013, as is often the case when a new government takes office, and particularly so this time as the government focused on advancing economic reforms. There was a pickup in the second ...