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Sheinbaum's historic win in Mexico spooks markets

Jun 04, 2024

Mexico City [Mexico], June 4: Claudia Sheinbaum, a climate scientist and protege of Mexico's popular outgoing president Andres Manuel Lopez Obrador, won a landslide to become the country's first female leader, though the scale of her victory sparked jitters in the markets.
Former Mexico City mayor Sheinbaum, 61, won the highest vote percentage in the history of Mexico's democracy, according to preliminary results from the electoral authority. She secured 58.8% of the votes with 82% of the ballots counted.
In her victory speech on Sunday night, Sheinbaum, a physicist who was part of a United Nations panel of climate scientists that received a Nobel Peace Prize in 2007, thanked Lopez Obrador, calling him "an exceptional, unique man who has transformed Mexico for the better."
The victory is seen as a major step for Mexico, a country known for its macho culture and home to the world's second-biggest Roman Catholic population. She is the first woman to win a general election in North America, comprising the United States, Mexico and Canada.
But her party's win was so large that markets fell on concerns that the ruling coalition could secure a congressional super-majority, allowing them to pass controversial constitutional reforms such as in the energy sector unchecked.
By 11.30am local time (1330 ET) on Monday, Mexico's peso had lost about 3.4% against the dollar while the stock market was down 5%.
Luis Maria Alcalde, interior minister in Lopez Obrador's cabinet, said the Morena party's ruling coalition won a super-majority in the lower house of Congress but will be a few seats short in the Senate.
Though if the coalition needs only a few opposition senators to bring about constitutional changes, such reforms are not unfeasible.
Part of the concerns are related to Lopez Obrador, a popular and polarizing titan of Mexican politics who has reshaped the country's political landscape over the past six years. He loomed large over the vote, casting the poll as a referendum on his national project to "transform" Mexico.
More specifically, Lopez Obrador proposed in February a set of constitutional reforms including hiking pensions, obligatory minimum wage increases, and the abolishing of some regulatory bodies, which investors saw as radical and unsustainable.
Lawmakers rejected the plans but investors fear Sheinbaum may pursue those reforms, which include above-inflation minimum wage hikes and election of judges by popular vote, analysts said.
Lopez Obrador on Monday said he would talk to Sheinbaum about pushing through some reforms in the month of September, a short period when he will remain as president even as new lawmakers join Congress. Sheinbaum takes office on Oct. 1 for a six year term.
Source: Fijian Broadcasting Corporation