MARKETS
The S&P / BMV IPC managed a marginal gain of 0.1% in the first full week of the year, with sentiment boosted by a lower-than-expected inflation rate and favorable comments from Banco de Mexico’s board, despite continued threats from US president-elect Trump regarding tariffs on Mexican imports and other negative comments about the country. Mr Trump is said to be evaluating a “national emergency” declaration to justify such tariffs. The Mexican peso appreciated 0.5% to MXN$20.51/USD while the yield of the Mexican 10-year M-Bono fell 11 bps to 10.24%.
The S&P / BMV IPC’s top stock gainers for the week were: TLEVISA CPO (+7.2%), PEÑOLES * (+5.2%), and BBAJIO O (+4.5%). The index’s biggest losers were: BIMBO A (-6.9%), KOF L (-5.9%), and CUERVO * (-5.4%).
Next week, we expect the following macroeconomic indicators: gross fixed investment, ANTAD sales, and Private Consumption indicator.
LISTED COMPANIES
Femsa completed the divestiture of its plastics solutions operations to AMMI, a leading diversified corporation focused on the production of non-GMO corn and sustainable plastic packaging, which is subsidiary of Milenio Capital. The transaction, which was announced on October 28th, 2024, amounted to MXN$3.165 billion, net of cash and debt.
FibraeMx acquired a 29% equity stake in Grupo Autopistas Nacionales (“GANA”), of which 18.2% was owned by Aleatica and 10.8% by Invex, after obtaining regulatory approvals. Aleatica received a cash payment while Invex received 77 million CBFE’s of FibraeMx with a market value of MXN$1.92 billion. Aleatica will remain as GANA’s largest shareholder with a 51% equity stake, while Invex will maintain a 20% equity stake.
Grupo BMV has received regulatory authorizations from Banxico and the CNBV to clear and settle debt instruments, including bonds, which supports the digitalization of bond trading. In its first stage, the new business will focus on clearing and settlement of government bonds (M Bonds). In the coming weeks, it will begin the process to incorporate banks and brokerage firms as clearing partners for this new service. Subsequently, it will expand to include other debt instruments and repos.
ASUR’s total passenger traffic increased 2.3% YoY to 6.7 million in December 2024, mainly as a result of a 16.2% increase in Puerto Rico and a 14.5% rise in Colombia, which were partially offset by continued weakness in Mexico, which saw a 5.7%.
GAP’s total passenger traffic grew 2.9% YoY to 5.87 million in December 2024, driven mainly by a 3.4% increase at the Mexican airports (with Guadalajara +5.2% and Tijuana +0.4%), which was partially offset by a 5.6% reduction at Montego Bay.
Terminal passenger traffic at OMA’s 13 airports increased 9.1% YoY in December 2024. Domestic traffic was up 6.2% and international traffic rose 26.1%.
In December, Volaris’ ASM capacity decreased 4.5% YoY, still impacted by the Pratt & Whitney engine inspections. Volaris transported 2.8 million passengers during the month with a load factor of 87.6%, a 2.2 pp increase from last year. RPMs for the month declined by 2.1%, with Mexican domestic RPMs down 8.3%, while international RPMs increased 9.0%. The company is now seeing stability across the network and the return to service of aircrafts that have completed their required engine inspections.
Grupo Acosta Verde (GAV) shareholders approved a series of measures to fend off the hostile acquisition offer from Planigrupo Latam, including: i) the creation of a MXN$3.7 billion share buyback reserve; ii) in case GAV decides to repurchase 3% or more of its outstanding shares in one or various successive transactions within a 20-day period, the buy-back will take place through a tender offer; and, iii) the company can launch such tender offer for up to 40% of its own shares.
GCC acquired three pure-play aggregates operations in Texas, for approximately US$100 million. These assets add more than 4 million tons of annual production capacity and more than 50 years of proven, high-quality reserves to GCC’s portfolio. The acquisitions strengthen GCC’s presence in the Amarillo, Midland-Odessa, Dallas-Fort Worth, and San Antonio markets.
Norte 19 will begin to operate 5 “Full Service” hotels of the HS Hotsson chain with 775 rooms, which are located in the States of Guanajuato and Querétaro. With this transaction, NORTE 19 will operate a total of 18,169 rooms and 156 hotels. This announcement is part of the company’s growth strategy in the multi-brand and multi-category hotel management business, taking advantage of its wide experience and technological platform.
Fibra Storage opened its 32nd branch in the Mexico City, located in the Granjas México neighborhood.
OTHER COMPANIES
Totalplay launched a US$600 million debt exchange offer for existing 6.375% Senior Notes due 2028, offering new 11.125% Senior Notes due 2032. The exchange is conditioned upon a US$270 million subscription of additional Senior Notes. The company said that 50% of existing bondholders have agreed to participate in the bond exchange, including Cerberus Capital Management, Aviva Investors Global Services and Amundi Asset Management U.S.
Government-owned airline Mexicana cancelled eight routes from the AIFA airport, apparently due to a restructuring. These include Acapulco, Campeche, Guadalajara, Ixtapa, Nuevo Laredo, Puerto Vallarta, Uruapan and Villahermosa.
President Claudia Sheinbaum announced the Olinia project, a mini-EV assembly plant, which will be financed with public and private capital. It will produce three models with prices ranging between MXN$90 K and MXN$150 K.
Oiltech Cantarell Energy Group closed a US$35 million series B investment round led by Smith and Locke Capital Brokers and investor Diego Garza Da Silva, which translated into a US$521 million valuation.
TRADE AND ECONOMICS
Mexico’s 2024 twelve-month inflation rate was 4.21%, below the 4.27% consensus expectation and the lowest annual figure since 2021. The inflation rate was 0.38% in December 2024, below the 0.43% consensus, according to INEGI. The core inflation rate registered a 0.51% monthly increase, vs. 0.50% expected, with merchandise up 0.40% and services rising 0.61%. Non-core inflation declined 0.04%, with agriculture prices down 0.64% and energy and government authorized tariffs up 0.45%. The last twelve-month core inflation rate was 3.65%, basically in line with the 3.64% forecast. These figures pave the way for Banco de Mexico to continue reducing its key interest rate in the next meetings.
Economists cut their GDP growth forecast to 1.0% (from 1.2%) for 2025 and anticipate an acceleration to 1.8% in 2026, according to the Citibanamex expectations survey. They also foresee an inflation rate of 3.91% in 2025 (from 3.90%) and 3.80% in 2026; a core inflation rate of 3.71% (from 3.70%) in 2025 and 3.61% in 2026; a 25 bps reduction in Banco de Mexico’s key interest rate to 9.75% in the February monetary policy, to close at 8.50% (unchanged) in 2025 and 7.50% in 2026; and a YE FX rate of 20.95 (from 21.0) in 2025 and 21.48 in 2026.
Banco de Mexico expects the inflationary environment to allow further reductions in the reference rate, according to the Minutes of the last monetary policy meeting. Given the progress of disinflation, downward adjustments of a greater magnitude could be considered in some meetings, although maintaining a restrictive stance. It will take into account the expectation that global shocks will continue to fade and the effects of the weakness in economic activity.
Mexico lost a higher than forecast 405,259 formal jobs in December, according to the IMSS. As a result, the number of formal jobs that were created during 2024 declined 67.2% to 213,993, which was the worst year since the pandemic. Concerns are rising that the Trump presidency and the government’s Plan C constitutional reforms are impacting confidence.
The Consumer Confidence Index was down 0.5 pts MoM (seasonally adjusted) to 47.1 in December 2024, which was the lowest reading in the last 3 months, INEGI reported. Four out of five components were lower on a monthly basis, led by “current household possibilities compared to a year ago” which decreased 0.9 pts and the “the country’s economic situation compared to 12 months ago”, which fell 0.8 pts.
The Monthly Indicator of Industrial Activity rose 0.1% MoM in November (seasonally adjusted), due mainly to the increases in mining (+0.4%), electricity generation, transmission and commercialization, water and gas supply (+0.8%), and manufacturing activity (+0.7%), which were partially offset by a 1.8% decrease in construction. However, industrial activity fell 1.4% YoY (original figures), due to the declines of 4.7% in mining, 4.2% in construction and 0.2% in manufacturing activity.
Light vehicle sales were up 1.9% YoY to 146,365 units in December, according to INEGI. As a result, cumulative sales for the year grew 9.8% YoY to nearly 1.5 million units, which was the strongest performance in the last 5 years. Meanwhile, annual production advanced 5.6% YoY to nearly 4.0 million units while exports were up 5.4% to 3.48 million units.
Mexico issued bonds amounting to US$8.5 billion in international markets, which was the first transaction of such type of the current administration. This included: i) US$2.0 billion in a 5-year bond with a 6.0% coupon; ii) US$4.0 billion in a 12-year bonds with a 6.875% coupon, and US$2.5 billion of a 30-year bond with a 7.375% coupon. Such a transaction covered most of the Government’s needs for 2025.
CETES auction: 28-day CETES -16 bps to 9.88%; 91-day CETES -16 bps to 9.82%; 182-day CETES -12 bps to 9.82% and 364-day CETES -7 bps to 9.99%.
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