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UBS Financial anticipates complicated year for Mexico

Mexico City, Mexico — Emilio Mahuad, general director of UBS Mexico, said that 2018 will be very complicated before the electoral process in Mexico, however, UBS will continue to drive the growth of its business platform in the country.

Emilio Mahuad said that “2018 is very complicated. I think that in 20 years in this business there has not been a year that we say it looks very good. That’s part of the strategy we want to achieve is to maintain the focus and see where the clients’ needs are.

“We can improve but it is very uncertain as the different letters of uncertainty such as NAFTA, elections, the tax cuts in the United States, are uncovered,” he said noting that in 2018, the renegotiation of the North American Free Trade Agreement (NAFTA), the federal elections, the tax cuts in the United States, the increase in inflation and interest rates anticipate a complicated year.

After taking over the general management of the financial institution in recent days, he said he will focus on continuing to drive the growth of the business platform in Mexico , “even though there is a vision of uncertainty in all of them in 2018,” but that uncertainty sometimes creates opportunities too.”

He indicated that 2017 was “for all of us a complicated year. I think of it as a year that there were two sides of the coin , the first half was very, very complicated, in the investment banking business there were very few transactions of both loan placements in capital, debt, and mergers and acquisitions, because confidence and uncertainty makes the decision making of the different boards of administrations take a little more time.”

In the second half, he indicated, the panorama was clarified, activity in the capital raising, debt and advisory business increased , “we were able to take a good proportion of the market share, we made between 10 and 11 transactions in 2017, the half of placements of stocks and bonds with international investors, and there are several transactions for sales or purchases of their businesses, and today we could not close several in 2017, but there is good buyer and seller confidence, involving Mexican and foreign companies that follow betting in the medium and long term in the country.”

Mahuad pointed out that with the tax reform in the US, they estimate that at a global level companies will seek those tax advantages, while Mexican corporations have two actions that they can take.

One is that national companies that are just looking to enter the US could take advantage of that option and two, those that already operate in that country could benefit from increasing their activity with their northern neighbor.

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