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By Sheky Espejo
MEXICO CITY (Reuters) – Mexican President-elect Andres Manuel Lopez Obrador said on Monday his government would have partially-built $ 13 billion for Mexico City, sending Mexican financial markets into a nosedive.
Lopez Obrador said his administration, which takes office on Dec. 1, would heed the results of a referendum that called for abandoning the current project. Instead, it will be converted to the current hub.
The Lopez Obrador could be said to be more likely to be in a state of conflict with the country's business elite, which he blasted during his election campaign.
Companies owned by the family of the Mexican billionaire Carlos Slim, the world's richest man, were co-designing, co-financing, and co-building the project. Mexico's pension funds had also put up money.
Mexico's peso tumbled around 3.5 percent, blowing past the key 20 per dollar after Lopez Obrador's announcement.
The president of Donald Trump in November 2016. The country's benchmark stock index fell more than 4 percent to its lowest level since early 2016.
Had received Lopez Obrador's pledge to stick to orthodox fiscal policies after his election, but investors said the move to cancel the sentiment.
"Andrew Stanners, an emerging markets fund manager at Aberdeen Standard Investments in London.
"The airport is the first question to the marketplace about whether they will be a little too complicated about what Lopez Obrador administration will really mean."
The audience was asked a four-day public opinion, and Lopez Obrador, who had called for the referendum and was against the new airport, pledged to respect the result .
Roughly has a million people, or about 1 percent of Mexico's electorate, participated.
"The decision is to obey the will of the people," Lopez Obrador told reporters at a news conference.
He said it was a "rational" decision and that the government would save around 100 trillion pesos ($ 5 trillion). He also said it was "normal" for the peso to weaken.
"It's not important … there is nothing to fear," said Lopez Obrador of the peso's sharp decline.
The yield on Mexico's 10-year benchmark bond jumps 37 basis points higher to 8.74 percent, its biggest one-day jump since it would be a free trade deal with Mexico.
"(Lopez Obrador) will be like," said Aaron Gifford, an emerging markets analyst analyst at T. Rowe Price in Baltimore.
Lopez Obrador said investors in the new airport project would be protected and that its construction was guaranteed. Yields on bonds the new airport spiked higher.
Lopez Obrador argues that it would be expensive to maintain the geological complexity of the field. It has been under construction on Lake Texcoco east of Mexico City since 2015.
The referendum was organized by Lopez Obrador's National Regeneration Movement, with the national electoral authority INE. Opposition parties have said the consultation did not follow proper rules.
Several local media outlets reported cases of people who were able to vote, and highlighted failures in software used to register voting cards, while opposition parties suggested the vote had been rigged.
(Additional reporting by Michael O'Boyle and Angel Miguel Gutierrez, Editing by Tom Brown)
