72% of investors in the country see that Morena, PT, PES, and PVEM will control fewer seats.
MEXICO (Forbes) – Investors have lost their appetite for government bonds such as Cetes. A new interest will depend on the outcome of the mid-term elections where Lower Congress is at stake. According to a survey conducted by Credit Suisse, most would not like to see Morena and its allies occupying the majority in Congress.
According to the survey, 41% of investors said this was a wrong time to add positions in these instruments, compared to 36% who said it was a good time. The Swiss-based investment bank points out that pessimism was more pronounced among investors based in Mexico, where it reached 44% in April, compared to 31% in January, while those found abroad were 37%.
“For the first time in the history of our surveys, we found a negative majority opinion on the convenience of adding risk positions in Mexico’s local government bonds,” the financial institution assured. It also indicated that the sentiment to add positions in the Mexican peso also worsened in April, reaching the highest level in twelve months. 46% of investors thought this was a wrong time to add positions in the national currency, while only 31% thought it was a good time.
More than 90% of domestic and foreign investors consulted said they would not like to see Morena and its allies occupying the majority in the Lower Congress after the June 6 elections. “An overwhelming majority of investors in Mexico and abroad stated that they would not like to see Morena and its allies control 2/3 of the majority in the Chamber of Deputies after the June elections,” the document states.
According to the study, 87 investors based in the country and around the world participated. Only 2% of those with a presence in Mexico would like to see this majority control by Morena and its allies PT, PES, and PVEM, and 60% foresee that these parties will lose the majority.
For investors based in the country, the outcome of the elections in the Lower House could change their investment strategy in Mexican assets, as 7 out of 10 investors assured that they will modify their bets.
While 3 out of 10 foreign investors assured that they would also modify their investment strategy after the election results are made known. “Investors based in Mexico seem to have more conviction than those based abroad about the Lower House elections. The survey shows that 72% of investors in the country see that Morena, PT, PES, and PVEM will control fewer seats,” the survey noted.
Despite this, most investors in the survey, 63%, continue to think that the Mexican stock market will be at a higher or much higher level in twelve months from now (in peso terms), while only 16% think it will be lower or much lower.
“The degree of optimism about the market was almost identical among investors based in Mexico (64%) and those abroad (63%). According to these opinions, 46% of investors said that this is a good time to buy Mexican stocks, while only 25% said it was a bad time to do so.”
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