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Global Markets and Economic Update

International Business

August 03, 1995

MEXICAN STOCKS

* Mexican stocks soared as interest rates continued to fall, spurring optimism that corporate earnings will rise, traders said.

* Stock prices were helped by the prospect of lower inflation. The Bank of Mexico said this week that consumer prices rose 1.01% in the first half of July, for an inflation rate of about 2%, compared to 3.2% in June. Bond yields fell.

* Traders said that with the dollar strengthening against the yen, more U.S. investment funds are headed overseas, including to Mexico. Morgan Stanley this week decided to boost its Mexico weighting to 26% from 24%, the first time this year it has increased its stake there.

The Bolsa Index

Wednesday closes: 2,442.77

Sources: Bloomberg Business News, Dow Jones

SPOTLIGHT: COLOMBIA

Perhaps the best-known sector of Colombia's economy is underground: The nation is the world's largest exporter of illegal narcotics. But the country is also driven by oil and coffee, its two largest exports. Inflation is above 20% but is forecast to ease. Colombia's manufacturing sector relies heavily on imports.

Source: Bank of America World Information Services

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