When BlackRock Inc.’s Larry Fink told attendees at a banking conference in Acapulco Friday that Mexico’s peso was cheap, he wasn’t alone.
Even after rallying 8.7 percent from a record low, the currency still has room to appreciate, according to analysts at banks from BBVA Bancomer SA to Mizuho Bank Ltd. The currency will post the biggest gain in emerging markets by the end of the year, according to forecasts compiled by Bloomberg. That’s more good news for investors in peso-denominated government bonds, which have already returned 5.6 percent in dollars in the past month, more than twice the emerging-market average.
Fink’s comment underscores investors’ renewed confidence in Mexico’s peso after policy makers took unprecedented steps to shore up the currency last month. It also reflects continued optimism that Mexico’s ties to the U.S. and its reforms of industries from energy to telecommunications will propel growth in Latin America’s second-biggest economy.
The peso is “quite inexpensive,” said Fink, who is chief executive officer of BlackRock, the world’s largest money manager. “The growth policies that your government is pushing ahead, whether it’s reforms of energy, telecommunications, labor, insurance, have transformed the economy and put Mexico in a position for much greater stable growth.”
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