MARKETS
The S&P / BMV IPC rebounded 3.6% after three weeks in the red led to the lowest level in the year, closing at 51,757 pts, once again above the 50,000 pts mark, as the Mexican market joined the rally in US equity indexes following optimistic comments from FED Chairman Jerome Powell, and discounted valuations helped ease concerns around Trump and domestic reforms. The Mexican peso recovered 1.1% to MXN$20.20/USD. The yield of the Mexican 10-year M-Bono was down 2 bps to 10.04%.
The S&P / BMV IPC’s top stock gainers for the week were: Q * (+14.5%), extending to 29% its rally since its November low, PEÑOLES * (+8.8) and RA * (+8.2%). The index’s biggest losers were: CUERVO * (-6.6%), BIMBO A (-2.6%) and PINFRA * (-2.2%).
Next week, we expect the following macroeconomic indicators: Inflation rate, consumer confidence and industrial production.
LISTED COMPANIES
GRUPO ELEKTRA’s shares collapsed 71% on December 2nd and 74% during the last week as its trading resumed trading after 5 months of being suspended due to a legal dispute between its controlling shareholder and a lender. The company called a shareholders’ meeting for December 27th to vote on the delisting from the MSE.
CEMEX has closed the sale of its Philippine operations in a series of separate transactions with a total value of approximately US$800 million and as part of a strategy to optimize its asset portfolio.
QUALITAS announced that Colombia’s Financial Superintendence recently authorized Quálitas Compañía de Seguros Colombia S.A. to operate in the automobile insurance sector. The subsidiary is now awaiting authorization from the Colombian Financial Superintendence to begin marketing its policies in early 2025.
ASUR reported that total passenger traffic decreased 1.2% YoY to 5.8 million in November 2024. Passenger traffic fell 7.1% YoY in Mexico, which was partially offset by an 8.7% YoY increase in Puerto Rico and a 7.7% YoY rise in Colombia. Meawhile, GAP’s total passenger traffic increased 1.8% YoY, which included a 2.5% rise at its 12 Mexican airports and a 7.4% decline at Montego Bay, and OMA’s terminal passenger traffic at its 13 airports increased 9.9% YoY in November 2024. Domestic traffic grew 5.8%, and international traffic advanced 40.7%.
VOLARIS’ total passenger traffic declined another 8.0% YoY in November to 2.55 million. Capacity (ASM) declined 3.7% due to the P&W engine inspections while occupancy fell 3.0 PP to 86.8%. The company also announced it has added the 140th aircraft to its fleet which will allow it to strengthen connectivity between various cities such as Querétaro, Ciudad Obregón, Los Mochis, Oaxaca, Mexicali and Monterrey.
Main highlights of ROTOPLAS’ AGUA DAY: i) sustainable growth of the traditional business; ii) growth and development of new businesses; iii) continue carrying out the digitalization process. Financial priorities: The first priority includes reversing the trend in EBITDA through a reduction in digitalization expenses, restructuring the workforce in 4Q24, and reducing expenses in all business units. The second priority will be to increase free cash flow through the optimization of working capital and controlled Capex with focus on maintenance Capex, while discretionary Capex will be approved monthly based on a strict criterion and service Capex will focus on high-performing businesses. The company expects these measures to have a positive impact on ROIC in the short term, and has a favorable outlook for 2025.
CITIGROUP has completed the separation of its Mexican operations into two new entities, Grupo Financiero Citi Mexico and Grupo Financiero Banamex, as part of a global strategy to leave consumer businesses in 14 countries to simplify its operations.
ALSEA has concluded the sale of Burger King Spain, as previously announced on August 5th. This unit has 54 restaurants at the end of 3Q24.
LASITES announced it has sold 448.8 million shares (44.88% of total offered) at MXN$3.0 each, during the first subscription right that took place from November 15th to November 29th. A Special Committee will decide whether the remaining shares: i) will be offered to those shareholders that participated in the first subscription period; or, ii) will be offered to any other person. In related news, SITES appointed Gerardo Kuri as its new CEO, in addition to his current position of LASITES’ CEO.
BANCO SANTANDER issued US$700 million in 5.621% Senio Notes due 2029 a record low spread over UMS.
GRUMA issued Senior Notes in two tranches which included US$500 million with a 5.39% coupon and maturity in 2034 and US$300 million with a 5.761% coupon and maturity in 2054. The company will use proceeds to pay down bank debt maturing between 2025 and 2027, and for general corporate purposes.
FARMACIAS BENAVIDES appointed Mr. Mauricio González-Luna Gutiérrez-Lascuráin as CEO as of December 2nd.
LACOMER opened a new “City Market” store in Mexico City, which required a MXN$401 million investment. The company now has 89 commercial units in the country.
OTHER COMPANIES
AEROMEXICO has filed a preliminary prospectus on the MSE to carry out a secondary public offering in both Mexico and the US.
Carlos Slim’s CONTROL EMPRESARIAL DE CAPITALES, purchased 604,000 shares of PBF Energy, a U.S.-based independent oil refiner and supplier, for around US$19 million in November. CONTROL EMPRESARIAL now owns 23.9% of PBF Energy’s outstanding shares.
NU MEXICO has signed an alliance with CHEDRAUI to allow the latter’s users to make cash deposits and withdrawals at the Arcus by Mastercard ATM network.
LA COSTEÑA appointed Alberto Arellano as its new CEO from January 1st, 2025. Mr Arrellano currently works as GRUPO LALA’s CFO.
KLAR, a Mexican financial services technology company, has acquired assets from Tribal, a financial solutions company, which will allow it to strengthen its offering for SMEs.
TRADE AND ECONOMICS
Hacienda reported that total federal revenues were up 2.1% YoY during the January-October period, exceeding the budget by MXN$61 billion. They were driven mainly by a 4.8% YoY increase in non-oil revenues (fiscal +5.3%, non-fiscal-1.6%, organisms and companies +4.7%), which was partially offset by a 12.4% YoY reduction in oil revenues (Government -57.8%, PEMEX +10.1%) due to lower oil production and natural gas prices. However, total expenditures rose 6.4% YoY.
Private consumption fell 0.3% MoM (seasonally adjusted) in September, mainly as a result of a 4.1% contraction in imported goods and a 0.3% increase in domestic goods, according to INEGI. Private consumption increased 1.0% YoY (original data), supported by a 2.7% increase in imported goods and a 0.8% rise in domestic goods. Meanwhile, Gross fixed investment was down 0.8% MoM (seasonally adjusted) in September, mainly due to a 1.1% decrease in machinery and equipment (domestic +1.0%, imported -3.3%) and a 0.4% reduction in construction activity (residential +5.8%, non-residential -4.5%).
Economists expect a 25 reduction to 10% in Banco de Mexico’s key interest rate in the next monetary policy meeting, according to the Citibanamex Expectations Survey. They maintained their interest rate expectation unchanged at 8.0% in 2025. They revised upwards their GDP growth forecasts to 1.6% (from 1.5%) in 2024 and 1.2% (from 1.0%) in 2025. They also expect an inflation rate of 4.38% (from 4.45%) in 2024 and 3.83% (from 3.80%) in 2025 and a YE FX rate of MXN$20.23/US$ (from MXN$20.00/US$) in 2024 and US$20.50/US$ (unchanged) in 2025.
Economists lowered their inflation rate expectations to 4.42% (from 4.43%) in 2024 and 3.84% (from 3.86%) in 2025, according to Banco de Mexico’s expectations survey. They revised upwards their GDP growth forecasts to 1.55% in 2024 and 1.23% in 2025 (from 1.41% and 1.22%, respectively); they increased their FX estimates to MXN$20.22/US$ for YE24 and MXN$20.71/US$ for YE25 (from MXN$19.85/US$ and MXN$20.06/US$, respectively), and they maintained their projection for Banco de Mexico’s interest rate at 10% for YE25 and 8.20% (from 8.12%) for YE25.
Remittances were down 1.6% YoY to US$5.7 billion in October, according to Banco de México. This was the second consecutive annual reduction, following the 4.6% decrease in September. Total transactions were up 0.8% YoY while the average amount per transaction declined 2.5% YoY. During the first 10 months of 2024, remittances grew 2.2% YoY to US$54.1 billion.
IMSS reported the creation of 24,696 formal jobs in November, which was the lowest figure since 2008. This brings the cumulative number of new formal jobs to 619,252 during the January-November period. The unemployment rate reached a historically low level of 2.5% in October, which was below the 2.9% consensus estimate and the previous month’s 2.9% figure.
The National Commission of Minimum Salaries approved a 12% increase in minimum salaries to MXN$419.88/day in border zones and MXN$278.80/day in the rest of the country, from next January 1st, 2025.
CONSAR’s Governing Board approved a reduction in the Afore system’s commissions from 0.566% on average in 2024 to 0.547% on average in 2025. Nine Afores will charge a 0.55% commission, while PENSIONISSSTE will charge 0.52%. Such adjustment will generate MXN$9 billion in savings for workers though 2030, in addition to the MXN166 billion savings generated by previous commission reductions.
President Claudia Sheinbaum announced an MXN$157 billion investment in 2025 for the construction of AIFA-Pachuca and Mexico-Querétaro passenger trains, as well as the Saltillo-Nuevo Laredo, Querétaro-Irapuato sections, the Interoceanic Train and an adaptation of the Maya Train as a new freight railway system.
CETES auction: 28-day CETES -5bps to 9.90%; 91-day CETES -12 bps to 9.88%; 175-day CETES -21 bps to 9.99% and 721-day CETES -31 bps to 10.08%.
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