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Marco Oviedo at Barclays said teacher protests are a sign that President Nieto may struggle to push through his energy and tax-law plans without modification. Oviedo said education reform shows that it won’t be easy to pass other reforms that hurt certain political groups or interests.
Opposition to Nieto’s pledges is undermining confidence in Mexico’s economy that led foreign investors such as Pimco increase bond holdings to a record in 2013.
Barclays said in July that the proposal to break the state oil company’s 75-year monopoly on drilling would attract investment, potentially adding 1.5 percent to growth.
Araceli Espinosa at Scotiabank said it is very important that the new government show it really has authority and sufficient power to pass all of these reforms.
Edwin Gutierrez at Aberdeen Asset Mgmt says the education protests are little more than a sideshow, while the whole focus remains very much on what’s going on energy reform, and as long as they push forward with their schedule, the market is happy.
Read the full article at http://www.bloomberg.com/news/2013-09-03/how-37-year-old-teacher-imperils-pimco-s-bond-bet-mexico-credit.html
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