December 3, 2018 / 12:07 PM / 6 months ago

Mexico ETF jumps as troubled airport hopes add to post-G20 rally

LONDON, Dec 3 (Reuters) - MSCI’s Xtrackers exchange-traded fund (ETF) jumped 3.7 percent on Monday as reports of a possible compensation deal for bondholders of Mexico City’s touted-to-be-scrapped new airport added to a worldwide stocks rally.

Several Mexican media outlets reported on Sunday that construction on the airport, cancelled by newly sworn-in Mexican President Andres Manuel Lopez Obrador, would continue pending the new government’s negotiations with the project’s investors.

The local media cited a two-page report detailing agreements made by the group building the airport, which noted a planned offer to purchase up to $1.8 billion of bonds in the airport.

Reuters could not verify the authenticity of the report, and Mexico’s finance ministry did not immediately respond to a request for comment.

“Assuming this is confirmed, it would be a very market-friendly signal, as the cancellation of the airport was the catalyst that started the recent selloff in Mexican assets,” said North Asset Management Portfolio Manager Peter Kisler.

The Mexican ETF jump was roughly 1 percent larger than a 2.7 percent climb in a similar Brazilian one. It also came as the Mexican peso enjoyed its best day against the dollar since June as it rallied more than 1.7 percent.

Reporting by Marc Jones; editing by Helen Reid

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