Risk Analysis of Mexico as an Investment destination
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This presentation tries to see how good or bad is Mexico as an investment destination on the basis of Political, Economic, Social, Technological, Environmental and Legal (PESTLE) factors
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Risk Analysis of Mexico as an Investment destination
- 1. MEXICO ABHIMANU SINGH | JAYASURYAA H. | RHYTHM MALHOTRA | ROHAN BHARAJ | SRIRAM S. AYYAR | UCHIT ARORA
- 2. POLITICAL RISK ANALYSIS • Ranks 103 out of 175 countries in Corruption Perception Index (CPI) • Rule of Law and Freedom for Protest are two parameters that are performing badly. • Present Government is showing policy stability and political will for growth oriented measures. • Economic Indicators validates the presence of a good political system.
- 3. Basis of CPI: Perceptions of corruption of those in a position to offer assessments of public sector corruption. Mexico is not showing considerable growth, while its not declining in status either.
- 5. EASE OF DOING BUSINESS
- 7. Particulars Rate Comments Interest Rate 3% As on November 2015 Interbank Rate 3.32% As on November 2015 Deposit Rates 0.84% As on December 2014 Government debt to GDP 30.7% As on December 2014 Government Bond 10Year 6.34% As on December 2015 GDP- Nominal $1.283 trillion As on December 2014 GDP Per Capita $8626 As on December 2014 CorporateTax Rate 30% As on December 2015 Personal IncomeTax Rate 30% As on December 2014 SalesTax Rate 16% As on December 2015 Social Security Rate 9.23% As on December 2014 Foreign Exchange Reserves 170 million As on October 2015 Gold Reserves 122 tons As on July 2015 Unemployment Rate 4.55% As on October 2015 Wages 292 MXN/Day As on October 2015 MinimumWages 70.1 MXN/Day As on October 2015 RetirementAge 65 years As on December 2015 Home Ownership Rate 76.4% As on December 2010 Population 123.79 million As on December 2014 source : tradingeconomics.com
- 15. RISK BRIEFING
- 16. SOCIO-CULTURAL ANALYSIS Hierarchical Society Collectivistic Society Masculine society Avoids Uncertainty Normative High Indulgence HOFSTEDE MODEL AIR QUALITY HUMAN DEVELOPMENT INDEX
- 17. SOURCES •A.M.BEST •Transparency InternationalCorruption Perception Index https://www.transparency.org/cpi2014/results •http://www.transparency.org/cpi2014/in_detail •Index of Economic Freedom- http://www.heritage.org/index/ •Freedom InTheWorld 2015- https://freedomhouse.org/report/freedom-world/freedom-world- 2015#.VjDNGX4rJdg •World Bank Doing Business Reports- www.doingbusiness.org •Tradingeconomics.com/mexico • http://www.heritage.org/index/ •HumanDevelopmentIndex •http://geert-hofstede.com/ •EIU Country Risk Ratings- http://viewswire.eiu.com/index.asp?layout=RKAllCountryVW3
- 18. Questions 1. Keeping the current situation in mind, do you think Hero Moto Corp should setup factory in Mexico? 2.What are the main factors hindering the high growth in Mexico?
Notas del editor
- Companies located in Mexico benefit from reduced shipping costs, as part of one of the world’s largest free-trade agreements, NAFTA. The passage of energy sector reform will bolster sentiment towards Mexican assets and contribute to stronger real GDP growth in the coming years.
- starting a business there requires 6.00 procedures, takes 6.30 days, costs 17.90% of income per capita and requires paid-in minimum capital of 0.00% of income per capita In 2011, Mexico launched an online one stop shop for initiating business registration. In 2013, eliminated the min capital requirement for limited liability companies. The applicant can obtain the authorization of using the company name online from the website www.tuempresa.gob.mx and the Ministry of Economy will issue the corresponding authorization., without paying any money.