Mexican stocks fell sharply on Monday on concerns a costly US bailout plan for troubled financial institutions may not resuscitate a slumping economy and surging oil prices added to worries about growth. The benchmark IPC stock index closed 2.21 percent lower at 25,131.91 points. The peso firmed 0.4 per cent as the greenback declined broadly on worries the credit bailout would bloat the already massive U.S. deficit.
The proposal would amount to the costliest US bailout for financial companies since the Great Depression. While the rescue could help ease financial turmoil, analysts said the cost of the bailout could weigh on economic growth in the United States, the destination for around 80 percent of Mexican exports. "Investors are looking to see how this plan comes out.
"People have priced out the possibility of financial Armageddon," said Nick Chamie, head of emerging markets research at RBC Capital Markets in Toronto. "But that said, many people are quite concerned about the cyclical downturn in the global economy and how this financial crisis is going to compound this problem," he said.
Shares of Cemex , the top US cement supplier, shed 2.89 per cent to 20.14 pesos while its shares on Wall Street dropped 3.05 per cent to $19.09.
East Africa Portland Cement of Kenya Full-Year Profit Drops 30%
East African Portland Cement Co., Kenya’s second-biggest producer of the building material, said full-year profit dropped 30 per cent because of foreign-exchange losses.
Net income declined to KES536.7m ($7.38m) in the 12 months through June, from KES764.2m shillings a year earlier, the Nairobi-based company said in a statement published in the Daily Nation newspaper today. Sales rose 13 per cent to KES7.2bn shillings as cement prices increased, it said.