2. Content
Country Risk
Stock Exchange
Treasuries Market
1.1
1.2
1.3
1.4
Exchange Rates
Inflation Rate1.5
Economic Confidence Indicator (IMCE)1.7
International Reserves1.8
Foreign Direct Investment1.9
Article Exchange
Latin America Update
Our Service Portfolio
2.1
2.2
2.3
Featured Content
Success Case Studies
3.1
Your Practice Leaders
3.2
Contact Information
3.3
3.4
Mexico Economic Overview Knowledge Center
How we can help
Investment Unit (UDI)1.6
3. Note: Mexican Pesos per Currency
Source: Mexican Central Bank, www.banxico.org.mx, 2018
$21.10
$21.60
$22.10
$22.60
$23.10
$23.60
$24.10
$24.60
$25.10
31/08/18
$22.3793
May June July
29/06/18
$22.9215
31/07/18
$21.8817
$16.15
$17.15
$18.15
$19.15
$20.15
$21.15
$22.15
31/08/18
$19.1792
May June July
29/06/18
$19.6912
31/07/18
$18.6457
$23.02
$23.82
$24.62
$25.42
$26.22
$27.02
$27.82
$28.62
31/08/18
$24.9435
May June July
29/06/18
$25.8733
31/07/18
$24.5433
Exchange Rates
$13.50
$14.00
$14.50
$15.00
$15.50
$16.00
$16.50
31/08/18
$14.6671
May June July
29/06/18
$14.9925
31/07/18
$14.3082
1.1
4. 208
188 189
175.00
180.00
185.00
190.00
195.00
200.00
205.00
210.00
June July August
EMBI - Country Risk
Note: Basis points
Country Risk
1.2
The Country Risk indicates the possibilities of an
emerging country failing to fulfill its obligations
over external debt payments, whether for capital
or interest.
It is composed of three main sources:
• Sovereign Risk
• Transfer Risk
• Generic Risk (political, social, devaluations)
The Big Three credit rating agencies are Standard &
Poor's (S&P), Moody's, and Fitch Group, providers
of credit ratings, research, and risk analysis.
The Emerging Markets Bond Index (EMBI) is a
benchmark index for measuring the total return
performance of international government bonds
issued by emerging market countries that are
considered sovereign. The EMBI includes dollar-
denominated loans and Eurobonds. The higher the
Country Risk, the larger the possibility of default.
Source: www.economia.com.mx, 2018 and www.countryeconomy.com, 2018.
Moody’s S&P Fitch
Date
Rating
Outlook
Date
Rating
Outlook
Date
Rating
Outlook
11/04/18 A3 (Stable) 18/07/17
BBB+
(Stable)
16/03/18
BBB+
(Stable)
United Mexican States Credit Rating
Long Term Rating – Foreign Currency
5. Source: Mexican Stock Exchange (BMV), http://www.bmv.com.mx/, 2018
47,663.20
49,698.01
49,547.68
46,500
47,000
47,500
48,000
48,500
49,000
49,500
50,000
June July August
Indice de Precios y
Cotizaciones (IPC)
Mexican Stock Exchange
1.3
The Mexican Stock Exchange (BMV) is a public
institution that operates under a concession granted
by the Ministry of Finance (SHCP), observing the
Mexican Securities Law. BMV is the second largest
stock exchange in Latin America with a total market
capitalization of over US$ 530 billion and 140
companies listed.
Its shareholders are authorized brokerage firms, which
each own one share. Its broad market indicator is
known as “Indice de Precios y Cotizaciones” (IPC).
On August 29, 2017, SHCP granted a new concession to
Bolsa Institucional de Valores (“BIVA”) to operate a
new stock exchange in Mexico.
Examples of Marketable Securities
• Capitals Market (Stocks, Fibras)
• Capital Development Market (CKDes)
• Debt Market (Government, Short, Medium and
Long Term Debt).
6. Source: Mexican Central Bank, www.banxico.org.mx, 2018
7.70%
7.74%
7.72%
7.68%
7.70%
7.72%
7.74%
7.76%
June July August
Government Treasuries Auction’s
Monthly Results (Cetes 28-days)
Treasuries Market
1.4
Mexico’s Central Bank (Banxico) carries out operations
in the securities market in order to regulate the
liquidity of Mexico’s financial system.
It also undertakes primary auctions of securities for the
government and other public sector entities, and
issues regulations on several financial operations of
financial intermediaries.
Cetes 28
Zero coupon bonds denominated in Mexican Pesos
issued by the Mexican Government. The instrument
due in 28 days is a common reference.
TIIE
The Equilibrium Interbank Interest Rate (TIIE) is
determined by the Bank of Mexico based on quotes
presented by credit institutions, and is calculated on a
daily basis (for periods of 28 and 91 days) having as its
starting date the publication in the Official Gazette of
the Federation. Highly used to set credit operations in
Mexico.
8.10% 8.10%
8.11%
8.10%
8.10%
8.11%
8.11%
June July August
TIIE – 28 days
7. Source: Mexican Central Bank, www.banxico.org.mx, 2018
4.51%
4.65%
4.81%
4.35%
4.40%
4.45%
4.50%
4.55%
4.60%
4.65%
4.70%
4.75%
4.80%
4.85%
June July August
Annualized Inflation Rates
measured monthly
Inflation Rate
1.5
Inflation can be defined as a continuous and
widespread increase in goods and services
prices.
The inflation rate for Mexico is based upon
the Consumer Price Index (CPI). INEGI
(Instituto Nacional de Estadística Geografia e
Informática) is responsible for calculating and
publishing the rate in the Official Gazette of
the Federation within the first 10 days of
every month.
The Consumer Price Index (CPI) is the
statistical instrument that calculates inflation
by continuously measuring the price changes
of households’ representative basket of
goods and services.
8. Source: Mexican Central Bank, www.banxico.org.mx and Ministry of Finance, www.sat.gob.mx, 2018
The Investment Unit (Unidad de Inversion,
UDI) is a value unit linked to the overall
movement of prices. It is commonly used in
financial operations or investment
instruments that are required to guarantee a
return above inflation. The Mexican Central
Bank is the responsible authority to publish
its value in Mexican Pesos for each day of the
month.
6.013531
6.040489
6.071394
5.980000
5.990000
6.000000
6.010000
6.020000
6.030000
6.040000
6.050000
6.060000
6.070000
6.080000
June July August
Investment Unit (UDI)
Investment Unit (UDI)
1.6
9. Source: Public Accountants Mexican Association, IMCP, http://imcp.org.mx/, 2018
The Mexican Economic Confidence Index,
IMCE, is an indicator which aims to quantify
the expectation of the perceived business
climate through the perception of more than
20,000 registered public accountants of
nearly 60 colleges affiliated to Public
Accountants Mexican Institute, IMCP.
The indicator is divided into two main
components, which presents the current
perception in the business climate as well as
the perspective in six months. Its score is
measured through a range of 0 to 140 points.
Higher values represent higher optimism.
Economic Confidence Indicator (IMCE)
71.52
75.13
76.00
$69
$70
$71
$72
$73
$74
$75
$76
$77
June July August
Economic Confidence
Indicator
1.7
10. Source: Mexican Central Bank, www.banxico.org.mx, 2018
Known as financial assets invested abroad by
the Mexican Central Bank that can easily be
converted into means of payment.
According to the Mexican Central Bank, the
following are considered as International
Reserves:
• Foreign bank notes and coins;
• Deposits, securities and stocks payable
outside of Mexico;
• Loans by Central Banks payable at no
longer than six months;
• The Special Drawing Rights at the
International Monetary Fund.
$173,177
$173,238
$173,570
$172,900
$173,000
$173,100
$173,200
$173,300
$173,400
$173,500
$173,600
June July August
International Reserves
(Million USD)
International Reserves
1.8
11. Source: Ministry of Economy, https://www.gob.mx/se/, 2018
The Foreign Direct Investment (FDI) is an
important catalyst for development, since it has
the potential to generate employment, increase
savings and attract foreign exchange, encourage
competition, strengthen the transfer of new
technologies and boost exports. All this
positively affecting the productive and
competitive environment of a country.
The General Direction of Foreign Investment
(DGIE), as part of Mexico’s Ministry of Economy,
makes available a series of statistical and
economic documents on FDI.
Foreign Direct Investmet
1.9
Construction,
5.7%
Mining,
10.3%
Electric
Energy
Generation,
13.7%
Manufacturing,
70.4%
FDI Origin by Sector
January – June 2018
12. Knowledge Center
The World's Most Innovative Leaders
What sets apart the superstars of innovation?
It's a combination of strengths from skills at leading innovation to powerful
connections with other leaders and, perhaps most important, an ever-growing
record of making big new things happen.
Featured Content
2.1
13. Article Exchange
Mitigating Risk related to Tax Reform
While tax planning opportunities associated with the Tax Cuts and Jobs Act (TCJA) may be a windfall to a CPA firm's
bottom line, vulnerability to professional liability claims exists.
One CFO’s Road to a New Career in Fintech
Understandably, newly hired finance chiefs often don’t have much to say to the outside world about the strategies
they’ll be pursuing or what success might look like in the new job. Still, they can have important voices.
How Power changes the CEO Brain
Through varying experiments by social psychologists and others, they found that people who are primed to feel
powerful become more goal-oriented and think more abstractly.
Small Companies Carry Greatest Cyber-Risk
More than half of top executives at small businesses don't believe their company is a target for cyber-criminals. They're
wrong.
Updated Guidance Highlights Key Changes in the Auditor’s Report
Updated staff guidance issued by the PCAOB provides practitioners with information on Auditing Standard 3101, The
Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion.
2.2
14. Latin America Update
Latin American And Asian Banks Are Promising For Long-Term
Investors
Investors this year have been very bearish about emerging
market currencies and other assets. A number of important
macroeconomic, political, and credit factors, should make us
consider whether the emerging market tide is finally turning. The
rate at which the dollar has been strengthening seems to be
slowing which would be good for emerging market currencies,
bonds, and equities.
Here’s How to Exit Latin America’s Maze of Corruption
By now, everyone knows that restoring trust in government is at
the center of Latin America’s political agenda. More than 80
percent of citizens in the region believe their elected officials are
corrupt. As the region’s population becomes increasingly
urbanized, connected and middle-class, tolerance of the “old
ways” of doing politics and business has melted away.
How Costa Rica Could Become the Regional Leader in Latin
America for Electric Vehicles
There is a huge untapped market for electric vehicles in Latin
America. Costa Rica is a regional leader in Latin America, as far as
driving much of the innovation behind the electric automotive
industry. It has introduced tax incentives for the industry, which
is likely to experience exponential growth in the next two
decades. Risks to investors nonetheless remain.
Argentine Currency Crisis spreads to Politics
It was only 10 months ago that Argentina’s president Mauricio
Macri was riding high. After a surprisingly strong performance by
his centre-right coalition in midterm elections, many believed he
was set up for an easy win in presidential elections next year. That
optimism began to fade after a currency crisis erupted in late April.
Blockchain Continues to Gobble Up Everything in Latin America
Over the last 20 years or so, the world has been in the grip of a
software revolution, paving the way for one of the most disruptive
technologies out there: blockchain. As the region develops at
breakneck speed, Latin America is poised to take full advantage of
blockchain, with dozens of entrepreneurs and startups already
creating world-class solutions that will change the way we use the
technology.
A US-China Trade Dispute May Be Good for Latin America
China and the U.S. are both the two largest customers and
suppliers to Latin America. Punitive tariffs levied by the U.S.
against Chinese products—and vice-versa—will create supply gaps
that Latin America can suddenly fill. A tax on Chinese and
American exporters equates to a subsidy to Latin American
exporters. And what company doesn’t appreciate a subsidy,
especially when another country is paying for it?
2.3
16. CONSULTING POWER THAT CAN BE
AVAILABLE FOR THE TIME REQUIRED BY
YOUR PROJECT, WITH NO LONG TERM
COMMITMENTS AND WITH HIGH LEVELS OF
FLEXIBILITY.
All our practice leaders are senior level
executives with experience in
multinational corporations and in specific
functional roles.
We get the job done at the same time
that we become agents of change for our
clients, bringing a fresh perspective into
problem-solving and sharing past
experiences and best practices.
Capable of fully embedding into your
operations and creating value since the
very first day. No learning curve.
Our Value Proposition
17. Success Case Study
CLIENT:
CONTEXT:
OUR
INTERVENTION:
RESULTS:
Mexican mid-size enterprise. Privately held. $20M USD annual revenues.
Our client was looking into different strategic alternatives to ensure growth in
the mid-term, including M&A, joint ventures, and international expansion. At
the same time, there were several challenges related to the integration of new
technologies into their service offer and, in general, understanding and guiding
the digital transformation of their business.
We proposed the creation of a formal business advisory board to support the
owners in the strategic decisions of their business. The board was integrated by
eight people. Three of the eight were consultants from our firm, the other three
were company partners, and we supported the recruitment of other two board
members with specific knowledge of digital technologies.
We established the agenda for the meetings, acted as facilitators and deployed
several strategic planning tools in order to help define a vision and a list of
priorities. We provided expert input into several of the discussions, gave
feedback to the partners, and pushed the process forward.
The business advisory board was key to exploring new concepts and ideas. It
helped the owners to put their thoughts and priorities in order, to determine the
set of strategies that better fit their overall vision, and to be more confident and
decisive in their decision making process. Once priorities and initiatives were
identified, the board supervised and supported their proper execution.
18. KNOW YOUR CUSTOMER / SUPPLIER
We can help you assess the risk within
your portfolio of client or vendors.
We can perform independent reviews on
your Procurement function, including
vendor activity, vendor concentration,
supply-chain risk, internal controls and
process efficiency.
We can assess your Procure-to-Pay or
Order-to-Cash cycles from an integral
perspective.
We can perform background checks and
specific investigations of selected
companies, helping you understand the
true nature of the parties you are dealing
with.
BUSINESS ASSURANCE
19. Complete Profiles
Armando Nuricumbo
Jorge Pulido
Oscar Becerril
Guillermo Lagos German de la Garza
CPA. CFE. MsC.
MBA.
MBA.
PhD. Former President Staff
Jesus Bush
MBA.
Accounting. Finance.
Risk. Audit. Strategy.
Financial Markets.
Investor Relations.
Corporate Strategy.
Open Innovation.
Financial Services.
Credit. Risk. M&A.
Intrapreneurship.
50+ Talent Solutions.
Government
Relations. PR & Crisis.
Your Practice Leaders
Alejandro Rico
MsC. Taxes
Tax advice.
Compliance initiatives.
Jose Trevino
Former NAFTA team
International Relations.
Business Landing.
Angel Hernandez
MBA.
Financial Planning &
Analysis.
Roberto Fernandez
MsC. IT
Information Technology.
Project Management.
Edgardo de la Rosa
MsC. Finance
CFO Services.
Treasury.
Jorge Silva
MBA.
IPO Preparation.
Corporate Governance.
20. How we can help your business projects
Immediate and
flexible support
for your projects
and initiatives
12
Practice
Leaders
More information
Full scalability. We
can be as big or
small as your
specific project
needs. Our lean
structure means
very atractive
consulting rates
Team of
internationally
recognized
business advisors
who provide a
fresh and
independent
point of view
Highly
personalized level
of service. We
focus on you! 40
Multi-
disciplinary
Senior
Consultants
16
Partnerships
with Other
Consultancies
21. We care about your business priorities.
Let’s talk!
E-mail: contacto@nuricumbo.com
Mobile/Whatsapp: + 52 (155) 5453 6309
Skype: nuricua
Twitter: @a_nuricumbo
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