Here Are the Assets That May Move on Election Night in Mexico

(Bloomberg) -- Investors seeking to wager on the fallout from Mexico’s Sunday night presidential election won’t have to wait for local markets to open.

When results from state races start rolling in at about 7 p.m. New York time, to be followed two hours later by early presidential results, the peso will already be trading during Asia’s morning. It may be the most important asset to watch given its robust liquidity.

Other options for traders in the immediate aftermath of the vote include Mexican bonds denominated in yen that trade in Tokyo, as well as a very small exchange-traded fund in South Korea that aims to track the MSCI Mexico equity index.

Once Europe opens, the options will be more robust. Some of the bigger Mexican companies have shares and bonds that trade on European bourses, and Mexico’s international debt denominated in euros will also be on offer. There are also more ETF options.

Here’s a list of the assets to keep an eye on before Mexico opens for business:

Currency

The peso, Latin America’s most-traded currency, tumbled in the second quarter as Andres Manuel Lopez Obrador rose in the polls and Nafta negotiations dragged on with no swift resolution in sight. Expect traders to be watching the exit polls carefully.

Sovereign and Quasi-Sovereign Bonds

Mexico and its flagship state-controlled oil company Pemex have issued bonds in Japanese yen, British pounds and Swiss francs. Here are the most important bonds to watch:

  • Mexico 2038 (JPY)
  • Mexico 2023 (JPY)
  • Mexico 2114 (GBP)
  • Pemex 2023 (CHF)
  • Pemex 2023 (EUR)
  • Pemex 2029 (EUR)
  • Pemex 2025 (EUR)

Corporate Bonds

A few of Mexico’s larger companies have also issued euro and pound-denominated debt. Here are the bonds to look out for:

  • Cemex 2024 (EUR)
  • Femsa 2023 (EUR)
  • America Movil 2020 (EUR)
  • America Movil 2073 (EUR)
  • America Movil 2073 (GBP)
  • Nemak 2024 (EUR)

ETFs

In addition to South Korea’s small ETF, there are a few funds traded in Europe that track Mexican assets. Here are the ones to watch:

  • Xtrackers MSCI Mexico UCITS ETF (Germany)
  • iShares MSCI Mexico Capped UCITS ETF USD (Switzerland)
  • HSBC MSCI Mexico Capped UCITS ETF (U.K.)
  • Kim Kindex MSCI Mexico ETF (South Korea)

Stocks

Some of the larger companies based in Mexico are dual listed in Europe. While trading in these securities is limited, there may be some movement in the European morning hours. Here are a few to watch:

  • America Movil (Euro Comp)
  • Penoles (Euro Comp)
  • Elektra (Spain SIBE)

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