Calderon unveils $234 billion Mexican Infrastructure Investment Plan

Shares in Mexican construction providers have been helped by an announcement from Mexican President Felipe Calderon of a plan to invest USD 234 billion on infrastructure over the next five years.

The plan, which involves partnerships with the private sector, includes building three new airports, more than 17,000 km of roads, upgrading sea ports and the railway network, as well as investment in energy and telecoms infrastructure.

The Government's commitment will depend in part on additional financing from fiscal reform, now under review.

At present the World Economic Forum ranks Mexico's infrastructure as less competitive than those of core emerging markets such as China and India.

According to Chris Palmer, Head of Global Emerging Markets at Gartmore, "The Calderon Government knew it had to invest to improve the capital base of the economy".

"This package should ease bottlenecks in the country's antiquated transport system and improve productivity".

"Over the short term, the stimulus should offset any contraction from fiscal reform".

"Over the longer term, more effective allocation of capital and labour, will, I believe, improve Mexico's potential growth rate".

"This should have important consequences for the country's wealth and its distribution".

The Government expects the package to boost Mexico's GDP growth by approximately 0.6% a year.

Key stock beneficiaries are expected to include Mexican cement producer Cemex, billionaire Carlos Slim's construction, roads operator IDEAL, and the Brazilian highways operator CCR.

All of these stocks are contained within Gartmore's SICAV Latin America Fund.

The Fund returned 62% over one year to June outperforming the benchmark index by over 5%.

The Fund ranks in the top decile relative to its peers'.

Concerned About Commercial Property, Think Global Focus, Says Gartmore While attention is usually focused on the state of the UK housing market, concern is increasingly mounting about the health of the commercial-property sector.

As the recent interest-rate rises take their toll, a number of fund companies have felt obliged to impose exit charges to stem a wave of selling by disappointed investors in their commercial-property funds.

Adding to the cocktail of concerns is the spillover from problems in the US sub-prime mortgage lending market.

As the US housing market has deteriorated, sub-prime loan delinquencies have risen.

Historically, this would have been a problem just for lenders but more recently such debt has been packaged and sold on to other investors in the form of collateralised debt obligations or CDOs.

The losses are most acute for those holding the riskier tranches.

Against such a backdrop, an unconstrained 'best ideas' fund that is designed to avoid economic black spots can become more appealing.

The Gartmore Global Focus Fund, run by Neil Rogan, contains the manager's 30-40 best ideas from all over the world.

Current holdings for both the OEIC and SICAV versions include Apple (iPhone expectations), Nintendo (the Wii factor), China Construction Bank (strong loan growth), BHP Billiton (commodities boom) and MAN (Eastern European demand for trucks).

The Global Focus Fund is rated AAA by Standard and Poor's and has been top quartile over one, two, three, four, five and six years.

Neil Rogan is AAA rated by Citywire.

'Source: Lipper.

Basis: Mid to mid, gross income reinvested and net of fees based in Euros.

As at 30th June 2007.

The sector is Lipper UK Offshore Equity Latin America.

The benchmark index is MSCI Latin American Index.

Source: Lipper.

Basis: Mid to mid, net income reinvested as at 30th June 2007.

Source: Gartmore as at 30th June 2007Special Offers For the Gartmore Cautious Managed Fund, the Gartmore Global Focus Fund and the Gartmore MultiManager range of Funds, for all lump sum investments until 30th September 2007.

1% discount on the initial charge 4% initial commission No Initial Charge on Investment Trust Schemes New investments into the company's investment trust ISAit, PEPit and SAVEit schemes; No initial charge for new investments £1,000 lump sum and minimum transfer value £50 minimum amount for monthly savings.

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