Mexico KPIs - December 2017

Our Monthly
Newsletter
Period: October – December 2017
Nuricumbo + Partners
Business Assurance • Interim Management • Risk • Strategy

Outline
Country Risk
Stock Exchange
Treasuries Market
1
2
3
4
Exchange Rates
Inflation Rate5
Economic Confidence Indicator (IMCE)6
International Reserves7
Foreign Direct Investment8
Article Exchange
Latin America Update
Our Service Portfolio
1
2
3
Featured Content
Success Case Studies
1
Your Practice Leaders
2
Contact Information
3
4
Mexico Economic Overview Knowledge Center
How we can help

Note: Mexican Pesos per Currency
Source: Mexican Central Bank, www.banxico.org.mx, 2018
$20.60
$21.10
$21.60
$22.10
$22.60
$23.10
$23.60
$24.10
29/12/17
$23.5729
October November December
31/10/17
$22.2871
30/11/17
$22.0430
$15.15
$16.15
$17.15
$18.15
$19.15
$20.15
$21.15
29/12/17
$19.6629
31/10/17
$19.1478
30/11/17
$18.6229
$23.00
$23.80
$24.60
$25.40
$26.20
$27.00
29/12/17
$26.5675
31/10/17
$25.3115
30/11/17
$25.0376
Exchange Rates
$13.00
$13.50
$14.00
$14.50
$15.00
$15.50
$16.00
29/12/17
$15.6740
31/10/17
$14.8588
30/11/17
$14.4425

The Country Risk indicates the possibilities of
an emerging country failing to fulfill its
obligations over external debt payments,
whether for capital or interest. The higher
the Country Risk, the larger the possibility of
default.
It is composed of three main sources:
• Sovereign Risk
• Transfer Risk
• Generic Risk
It is measured through the use of the
Emerging Markets Bond Index (EMBI)
created by J.P. Morgan Chase.
Source: www.economia.com.mx, 2018
181 181
183
180.00
180.50
181.00
181.50
182.00
182.50
183.00
183.50
Country Risk
Note: Basis points
Country Risk

Source: Mexican Stock Exchange (BMV), http://www.bmv.com.mx/, 2018
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.
Its shareholders are authorized brokerage
firms, which each own one share. Its broad
market indicator is known as “Indice de
Precios y Cotizaciones” (IPC).
Marketable Securities
• Capitals Market (Stocks, Fibras)
• Capital Development Market (CKDes)
• Debt Market (Government, Short,
Medium and Long Term Debt).
48,625.53
47,092.44
49,354.42
45,500
46,000
46,500
47,000
47,500
48,000
48,500
49,000
49,500
50,000
Price and Market Rates Index
(IPC)
Mexican Stock Exchange

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.
7.03%
7.01%
7.22%
6.90%
6.95%
7.00%
7.05%
7.10%
7.15%
7.20%
7.25%
Government Treasuries
Auction’s Monthly Results
(Cetes 28-days)
Treasuries Market

Inflation can be defined as a continuous and
widespread increase in goods and services
prices.
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.
6.35%
6.37%
6.63%
6.20%
6.25%
6.30%
6.35%
6.40%
6.45%
6.50%
6.55%
6.60%
6.65%
6.70%
Annualized Inflation Rates
measured monthly
Inflation Rate

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.
5.835159
5.886896
5.931331
5.780000
5.800000
5.820000
5.840000
5.860000
5.880000
5.900000
5.920000
5.940000
Investment Unit (UDI)
Investment Unit (UDI)

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)
73.82
73.14
79.23
$70
$71
$72
$73
$74
$75
$76
$77
$78
$79
$80
Economic Confidence
Indicator

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.
$172,820
$172,749
$172,465
$172,200
$172,300
$172,400
$172,500
$172,600
$172,700
$172,800
$172,900
International Reserves
(Million USD)
International Reserves

Source: Mexican Central Bank, www.banxico.org.mx, and Federal Reserve Bank of St. Louis, 2018
The Interbank Interest Rate (TIIE) is
determined by the Bank of Mexico based
on quotes presented by credit institutions,
having as its starting date the publication
in the Official Gazette of the Federation.
Highly used to set credit operations in
Mexico.
Libor (London Interbank Offered Rate) is
London's interbank interest rate; it is the
interest rate that banks offer to lend
money to each other in the wholesale
money markets in London. Highly used to
set credit operations in international
markets.
TIIE and Libor Interest Rates
0.00001
1.00001
2.00001
3.00001
4.00001
5.00001
6.00001
7.00001
TIIE Libor
December

Source: Ministry of Economy, https://www.gob.mx/se/, 2017
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.
(January – June, 2017)
3.5%
4.0%
4.1%
4.2%
5.0%
7.2%
7.0%
7.3%
7.5%
9.0%
12.0%
13.0%
21.0%
37.0%
41.0%
15. Australia (15)
14. Canada (18)
13. Singapur (18)
12. Vietnam (14)
11. Spain (25)
10. Philipines (9)
9. Mexico (7)
8. Germany (5)
7. UK (4)
6. Brazil (7)
5. Thailand (14)
4. Indonesia (8)
3. India (3)
2. China (2)
1. US (1)
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
Most Attractive FDI Recipient
Economies, 2017
(Percentage of companies that selected a
country as priority destination)
Foreign Direct Investmet
*Numbers in brackets indicate the position of the
previous year.

Featured Content
11 Positive Developments in the World
Around the world, the year 2017 saw no shortage of divisive politics, escalating nuclear threats,
devastating natural disasters, ongoing wars, and otherwise distressing developments.
The following article from the Brookings Intitute shares some uplifting pieces of research that are sure to
restore your optimism just in time for the New Year.
https://goo.gl/pTgD9S

Article Exchange
How to Start a Business in 2018
People who receive substantially large bonuses may be able to completely self-fund their ventures. More likely, aspiring
entrepreneurs will seek outside business financing.
https://goo.gl/QmRjR7
FASB proposes Lease Standard Implementation Improvements
FASB issued a proposal Friday designed to ease — and reduce costs associated with — implementation of its new
accounting standard for leases.
https://goo.gl/G2hyZm
Share Buybacks: Who Really Benefits?
Corporations should exist for a greater purpose than maximizing value to shareholders — and executives.
https://goo.gl/qFk82j
Lenders now taking Bitcoin as Collateral
Firms are providing a 'bridge to liquidity' for investors and businesses by originating loans secured by the
cryptocurrency.
https://goo.gl/YFErzz
Nafta's Dead. Long Live Nafta. A Look at Likely Outcomes
Markets shuddered on signs the U.S. may be preparing to withdraw from Nafta. But even if President Donald Trump
serves notice of a pullout, the trade deal could survive.
https://goo.gl/pfboUh

Latin America Update
A Renaissance for Development Banks
Since the credit crunch, many private banks have retreated from
lending to key economic sectors. So governments are stepping in –
creating development banks to support start-ups and the industries
crucial to sustainable growth. By addressing gaps in the market,
national development banks obey a broader strategic vision of
economic development that emphasizes public interest over profits.
A recent global symposium on development banks explored their
continuing relevance. One estimate puts the number of these at
over 500, of which about a fifth were created in the last 17 years.
Corruption Arrests in Argentina Raise Hope, and Skepticism
In recent months, at least five prominent former officials, including
a vice president and a former planning minister, have been taken
into custody to await trial on corruption charges. Several allies from
the private sector who stand accused of misappropriating public
funds have also been locked up. The detentions come as President
Mauricio Macri has vowed to upend Argentina’s culture of impunity
in graft cases by reforming the penal code, making government
contracting more transparent and tracking assets of public servants.
Russia, China And Iran Lose Interest In Venezuela
Since the election of Hugo Chávez to the Venezuelan presidency in
1998, followed by Nicolas Maduro in 2013, Venezuela has endured
steady decline with the approval of the new constitution in 1999,
concentration of presidential power, the capture of state and
private institutions, gradual control over the press, mismanagement
of its national oil company and establishment of a failed political
project known as the “socialism of the 21st century.”
Is Latin America turning toward Free Markets?
First, Argentina’s Macri unseated the Peronists, who had turned an
emerging country into a fourth-world disaster. Then Bolivia’s Evo
Morales lost a referendum in his effort to overcome constitutional
term limits. Then Brazil’s Dilma Rousseff was impeached amid a
national revolt against corruption and was succeeded by her vice
president, himself under suspicion, who is bent on reversing decades
of profuse government interventionism. Is this trend sustainable and
will these new or prospective governments engage in bold reform or
manage the legacy? We can expect a degree of dynamism — it’s
already happening. We have seen Brazil and Argentina move in the
right direction, with varying degrees of intensity, on fiscal reform, tax
reform, labor reform, pension reform, and other issues.
Banking on Security in an Environment of Threats
The global financial crisis of 2008 was a piercing wake-up call for the
financial industries of the world. It brought several regulatory and
legislative changes in its wake, all aimed at preventing the recurrence
of such an event. But the years since then have seen a different kind
of threat emerging. The warning sirens are more frequent than
before and more insistent. But probably the most important lesson
learned by the financial industry was that it needed to adopt a more
responsible approach towards risk management.
Corporate Mining in Latin America is the Source of Social Conflict
A recent academic study examined the data relating to growth in
mining exports and the growth in environmental conflicts across
Colombia, Ecuador, Peru and Bolivia. The correlation is almost
perfect. Victims' of such conflicts become environmental ‘warriors’.

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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 (Touch & Play).
Our Value Proposition

OUR SERVICE PORTFOLIO
BUSINESS ASSURANCE
 Financial Due Diligence
 Internal Audit Co-Sourcing
 Know Your Customer / Supplier
 Anti-Corruption Programs
 Loan Review
 Contract Compliance
TALENT SOLUTIONS
 Interim Management
 Project Support
 Rotation Insurance
 Test-Drive Model
 Project Management
 Training & Development
FINANCE OPTIMIZATION
 Retirement & Insurance
 Credit Solutions
 Private Equity
 Process Automation
 Trust (Fideicomiso) Management
 Treasury in the Cloud
STRATEGY & COMMUNICATIONS
 Strategic Planning
 Innovation
 IPO Readiness
 Change Management
 Business Landing Services
 Proprietary Marketing Program

Success Case Study
CLIENT:
CONTEXT:
OUR
INTERVENTION:
RESULTS:
U.S. Multinational. Leader in the global advertising industry. Fortune 500.
Our client had acquired a large operation in Mexico. We were hired to review
specific items that were the subject of a controversy between the acquirer and
the target company. These items had a direct impact on the earn-out
calculations that affected the purchase price of the transaction. Many of the
items were subject to interpretation, which created discrepancies and conflict
among the parties involved.
Our intervention was directed into providing an independent opinion on the
conflicting items that were affecting EBITDA. This required the performance of
certain audit procedures to ensure that the accounting procedures were
acceptable, as well as performing an assessment of the internal control
environment. In a second stage, we provided an independent and objective
point of view on the controversial items, moving the discussion into a more
technical base and removing the individual interpretations. Finally, we also
played a role of mediators, helping the parties to find common ground and
giving alternatives that would help to find a solution that was fair to all parties.
Our audit was very well received. The report was used as a starting point in the
negotiations. We played an active role in facilitating the technical background
behind each one of the points, and provided an independent voice that helped
reached a final solution.

ARMANDO NURICUMBO, CPA
MANAGING DIRECTOR
Public accountant with solid
international experience, CPA in
Mexico and USA (Illinois),
ex-PwC, proven executive in multiple industries
including financial services, advertising, consulting,
manufacturing and hospitality. Holds a Bachelor
degree in Accounting, Summa Cum Laude, from
the National University of Mexico (1996) and a
Masters degree in Asian Studies from Tamkang
University in Taiwan (2016). Current Co-Chair of
the Financial Executives Networking Group (FENG)
Mexico chapter. Member of IMEF.
Able to effectively manage complex business
projects, remove roadblocks between Parent and
Subsidiary, optimize business operations, and
protect business interests of foreign companies
operating in Mexico and Latin America.
OSCAR BECERRIL
RISK MANAGEMENT
Oscar Becerril has more than
25 years of experience
in credit, risk management,
banking, leasing, and in general financial services
activities, giving consultancy and advice to
companies of all sizes in risk management and
financial strategic planning.
He has specialized in loan review and due diligence
risk valuation for financial institutions, including
structured debt and trust guarantees. He has
developed key relations at C-Suite level with strong
knowledge of a diverse set of sectors, including
Mexican publicly-traded corporations, housing,
tourism, and financial services. He has developed
an excellent understanding of the key pre-
requisites underlying successful financial
institutions. Graduated Summa Cum Laude from
LaSalle University (Management).

GERMAN DE LA GARZA
POLITICAL STRATEGY
Political consultant with
long term experience in
Government. Excellent understanding of public-
private interactions, political landscape, public
bidding processes, public relations, crisis
management and political communication.
He has worked for the Ministry of Health Services,
the National Fertilizer Company (Fertimex), and
the Mexico City Government. In 2006 he was
elected Delegado of Benito Juarez with the largest
popular vote ever, running as candidate of the
Partido Accion Nacional.
In 2010 he was designated by the President of
Mexico as Oficial Mayor of the Social
Development Ministry (Sedesol) and coordinator
of Oficiales Mayores of the Federal Government.
Lately he is involved in academic projects.
JOSE TREVINO
INTERNATIONAL RELATIONS
José Treviño holds a degree
in International relations from
El Colegio de México and has forty years of public
and private professional experience. He has
specialized in assisting North American
governments and investors achieve their business
objectives in the context of NAFTA.
José is currently President of the Mexico-Canada
Business Committee at the Mexican Council for
Foreign Trade, Investment and Technology
(COMCE). From 1999 to 2001, José served as the
Executive Vice-President for North America of the
Mexican Investment Board (MIB).
In the nineties, he had a leadership role in the
trilateral effort that resulted in the passage of
NAFTA, acting as trade representative of the
Mexican government in Washington, D.C.

GUILLERMO LAGOS
INNOVATION &
CORPORATE TRANSFORMATION
Recognized business consultant,
former DGA of Corporate Banking
at Banco Azteca, Director of Innovation and
Entrepreneurship at EGADE business school
(ITESM), and founder of Moonshot Fab, a
successful start-up incubator.
Guillermo has an extensive academic career
analyzing the factors that contribute to successful
innovation and transformation within the most
complex organizations. He has been professor at
ITESM for more than 30 years and has contributed
with original research in the fields of management,
leadership, intrapreneurship and Company 4.0.
Guillermo holds an MBA degree from the Business
School of the University of Stanford. He is a
frequent speaker at multiple innovation events.
JORGE PULIDO
INVESTOR RELATIONS
Jorge is a seasoned professional
and expert in corporate
financing, financial and strategic planning,
international treasury, foreign trade, investor
relations, crisis management, corporate
communications, and financial markets.
He had extensive experience as Head of Investor
Relations for more than fifteen years with Grupo
Mexico, a Mexico-based publicly-traded
corporation and one of the largest integrated
copper producers in the world, with operations in
Mexico, Peru, Chile and the USA.
Jorge holds an M.A. degree from ITESM. Recently,
his interests have turned into Asia, leading the
Mexico-Korea bilateral business group, spending
time understanding the supply chains between
Asia and North America.

JORGE SILVA
ACCOUNTING & FINANCE
Former PWC veteran with
solid experience in accounting,
finance and audit projects. He is also expert in
market entry initiatives and corporate innovation.
He was in charge of the PwC Accelerator program,
focused in both the internationalization of
Mexican companies going abroad and the landing
of foreign companies expanding into Mexico and
Latam.
He was part of the PWC Mexico Energy team,
delivering specialized projects such as statutory
and full-scope audits of PEMEX and SHELL Mexico,
restructuring initiative for the Petrochemical
division of Mexican conglomerate ALFA, and SOX
implementation at PEMEX Exploration. Jorge also
has experience in technology, entertainment,
consumer products, and food and beverage.
ALEJANDRO RICO
TAX & COMPLIANCE
Public accountant graduated
Summa Cum Laude from UNAM
(1994). Postgraduate studies at the
same university. Member of the Mexican Institute
of Public Accountants (IMCP) since 2005. Certified
by the IMCP since 2011. Has specialized in the
study of federal and state taxes, combining deep
understanding of financial and tax issues to
propose well-thought solutions to companies in
different industries.
In 2016 he was host of the radio program “Easy Tax
Radio”, where he provided an expert point of view
on tax problems for companies of all sizes. He is a
certified trainer for tax and accounting programs
and a frequent lecturer at universities across
Mexico. Solid understanding of the connections
between tax strategy, accounting issues, and IT
related solutions.

How we can help
WE ARE READY TO HELP WITH YOUR MOST PRESSING BUSINESS PRIORITIES
IN MEXICO AND LATIN AMERICA.
We can help you identify valuable options in the resolution of key challenges.
Let’s schedule a call or meeting at your convenience.
Our greatest objective is to help you resolve complex business problems.
For more information on our service portfolio, please click here.

E-mail: armando@nuricumbo.com
Facebook/LinkedIn Messenger: armando.nuricumbo
Twitter: @a_nuricumbo
Skype: nuricua
Mobile/Whatsapp: + 52 (155) 5453 6309
Office: Montes Urales 424. Lomas de Chapultepec. 11000. CDMX.
Contact Information

Mexico KPIs - December 2017

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