Research and analysis

Mexico: visit by the Lord Mayor of London

Published 30 May 2014

0.1 Summary

Lord Mayor engaged with the key players managing Mexico’s historic structural reforms. The respect in Mexico for her expertise reinforced the UK’s reputation as a trusted source of advice. Interest in further UK support on the implementation of energy reforms. A great platform to promote all that the city, and the UK as a whole, have to offer as opportunities open up in different sectors of the Mexican market.

0.2 Detail

The Lord Mayor of London, Alderman Fiona Woolf, ended her Latin American tour in Mexico City from 15-17 May. She was accompanied by a delegation representing UK Export Finance, London & Partners and the City’s financial and professional services sector. The Lord Mayor is remembered and respected in Mexico for her work here in the late 1990s on electricity sector reform.

The Government View

The architect of Mexico’s reform programme – Finance Minister Luis Videgaray – hosted an extended discussion with the Lord Mayor over breakfast, accompanied by his core team working on implementation of the energy reforms. Videgaray confirmed the aim was to secure passage of the secondary legislation by late June or early July. The key thing would be to put in place new regulatory arrangements this year.

Views from the Energy Sector

In a meeting with their finance team, the Lord Mayor heard how state oil and gas monopoly PEMEX are upbeat about prospects for British companies, and their own moves to become a competitive company in an open market. The Lord Mayor outlined UK expertise in production, exploration, training, financing and related services – and proposed a visit to the UK to see new models of financing being developed by the sector.

At the state electricity generator CFE, the Lord Mayor heard about investment opportunities already available in the electricity generation, transmission and pipeline sectors. At a private sector energy roundtable, British energy companies confirmed their interest in forthcoming oil, gas, and renewable energy contracts. Through the Lord Mayor, the companies wanted to reassure London markets that energy reform in Mexico was a reality.

Financial and Professional Services

At dinner with the banking sector, Central Bank Governor Carstens briefed the Lord Mayor on his confidence in the longer-term, post-reform prospects for the economy (comment: since the visit, and as expected, the Bank has adjusted its growth forecast for 2014, from a range of 3.0% - 4.0%, to 2.3% - 3.3%). The Lord Mayor updated guests on regulatory developments in the UK; while Carstens spoke of his collaboration with the Bank of England and HMT. At lunch with the HSBC Mexico Board, the Lord Mayor heard how the bank is further increasing its presence in Mexico, including a £1bn+plus programme with the National Development Bank to help SMEs take advantage of opportunities in the energy sector. The Lord Mayor witnessed signature of an MoU between the Chartered Institute for Securities and Investment (CISI) and the Mexican Association of Brokers, allowing these organisations increased access to each others’ markets and opening up opportunities for training and capacity-building.

Listings and Inward Investment

The Vice President of the Mexican Stock Exchange (MSE) explained the importance of energy reform for the development of their trading platform – and MSE’s interest in getting closer to the London Stock Exchange. He highlighted the success of their Sustainability Index – developed with UK Prosperity Fund support – and their interest in developing green financing solutions. Later, the Lord Mayor encouraged more Mexican listings on the London Stock Exchange. At dinner at the Residence with Mexican clients, foreign exchange company Monex explained how investing in a UK presence had benefitted their business, encouraging others to consider similar investments.

Supporting British exports

The Lord Mayor delivered a keynote speech at a British Chamber of Commerce event outlining the strength of the UK business environment, and looking forward to increased exports of UK goods and services to Mexico. She emphasised that British companies were particularly well placed to take part in projects under the £385 billion National Infrastructure Plan. The Lord Mayor also inaugurated the impressive new British Business Centre, part of the Overseas Business Network Initiative. The Centre (located in the heart of Mexico City’s business district) provides office space and professional services to new British companies in Mexico.

Comment

The Lord Mayor’s personal connection with Mexico – and her deep expertise in issues of immediate relevance to the reform agenda – made this a very special visit. Positive media coverage of the visit detailed the UK’s strong interest in infrastructure and professional services, as well as the energy sector.

0.3 Disclaimer

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