Why 2014 could be Mexico's year

  @FortuneMagazine December 19, 2013: 7:38 AM ET
INV13 mexico

Last year at this time investors were rushing into Mexico. A new President with an ambitious reform to-do list had just taken office. And the largest IPO in Mexican history, the $4 billion offering of Spanish bank Santander's Mexican division, had just taken place. To listen to the government, 2013 would elevate Mexico to an economic powerhouse. But the new administration pinched pennies and GDP growth slowed to just 1%, a fraction of 2013 expectations. By December, stocks were down 4% and many investors seemed to give up hope. "They felt Mexico's moment was slipping," says David M. Darst, chief investment strategist for Morgan Stanley Wealth Management, who spent much of the past two years on the ground in Mexico studying the country's prospects.

Now many are singing the same refrain they sang last year: 2014 will be the market fiesta that 2013 wasn't. Those who bet on Mexico last year are rightfully wary of being fooled again, but there's a good case to be made that 2013's optimism wasn't wrong, just premature. Recent legislative reforms of the nation's tax and education systems -- as well as telecom and energy infrastructures (more on those in a bit) -- are beginning to give Mexico's sprawling middle class a boost. That, says legendary investor Mark Mobius, executive chairman of Templeton Emerging Markets Group, is fueling "explosive growth in demand" for consumer products. And Mobius isn't one to mince words: "We see a great future for Mexico and want to be part of that future," he tells Fortune.

Join the Conversation
Sponsored by
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 8:07pm ET
Company Price Change % Change
Bank of America Corp... 16.15 0.00 0.00%
Facebook Inc 58.94 0.00 0.00%
General Electric Co 26.56 0.00 0.00%
Cisco Systems Inc 23.19 -0.02 -0.09%
Micron Technology In... 23.91 0.00 0.00%
Data as of Apr 17
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.36%4.24%
15 yr fixed3.39%3.26%
5/1 ARM3.36%3.27%
30 yr refi4.34%4.22%
15 yr refi3.38%3.24%
View rates in your area
Find personalized rates:
Rate data provided
by Bankrate.com
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.