Mexico's market ``has the best momentum of the Latin American markets,'' according to Morgan Stanley's Latin America strategist Robert ``Jay'' Pelosky. In a statement today, Mr. Pelosky pointed to the Mexican market's 2.9% rise last week, despite the U.S. market's tumble. ``Friday's 4%-plus move'' in the Mexican market ``was broad-based and occurred on good volume; in fact, our rolling volume average is now at levels last seen'' in August 1994, he said.
Mr. Pelosky sees Mexico's market performance decoupling from that of the U.S. market because of gradual economic recovery in Mexico, lower interest rates, rising earnings per share and a stable peso. He continues to have an overweighted 31% Mexican exposure in his Latin American model portfolio, compared with Mexico's 28% weighting in the MSCI Latin America Free Index. He remains focused on the interest rate-sensitive sectors of finance, construction, cement and consumer goods.