MARKETS
The S&P / BMV IPC was down 0.9% in the past week, closing at 51,284.21 pts, following the American equity indices, amid local negative sentiment stemming from weak macroeconomic data. The Mexican peso remained virtually unchanged at MXN$20.22/USD while the yield of the Mexican 10-year M-Bono was up 28 bps to 10.32%.
The S&P / BMV IPC’s top stock gainers for the week were: PEÑOLES * (+7.2%), BOLSA A (+5.3%), and OMA B (+3.7%). The index’s biggest losers were: CEMEX CPO (-5.7%), GCARSO (-4.2%) and ALFA A (-4.0%).
Next week, Banxico’s monetary policy meeting will take place, with economists expecting a 25 bps reduction in the key interest rate. We expect the following macroeconomic indicators: retail sales, aggregate supply and demand, and the Citibanamex expectations survey.
LISTED COMPANIES
Grupo Acosta Verde (GAV) called a General Shareholder’s Meeting for next January 8th to approve the repurchase of up to 40% of its outstanding shares as a strategy to fend off the hostile takeover offer by Planigrupo. The majority (eight out of 11) of GAV’s Board members said that the offer price offered by PLANIGRUPO LATAM (a GMEXICO subsidiary) to acquire 100% of the company’s shares was not reasonable from a financial and liquidity point of view based on the opinions of Capital 414 as independent appraiser and GAV’s Corporate Practices and Audit Committee. However, two Board members appointed by Equity International, GAV’s largest shareholder with 34.27% of shares, considered that the price offered is within a “reasonable range”.
In a much smaller than expected punishment, COFECE has imposed a fine of just MXN$93.4 million on WALMEX’s main operating subsidiary in Mexico for engaging in a single monopolistic practice related to supplier contributions. While COFECE allows WALMEX to continue negotiating supplier contributions, it has restricted two specific types out of the four originally investigated. WALMEX plans to challenge COFECE’s decision.
FMTY completed the acquisition of the “Batach” industrial portfolio in Monterrey, which includes eight stabilized Class A buildings, with total GLA of approximately 185,966 square meters. The total purchase price amounted to US$192.4 million, plus VAT, acquisition costs, and other expenses, of which US$119.0 million were paid at closing, covering six properties. The US$73.4 million payment for the remaining two buildings will be settled upon their completion and the beginning of the lease payments in 2Q25. The portfolio is expected to generate an NOI of approximately US$14.1 million during its first twelve months within FMTY’s portfolio. This acquisition was financed with proceeds from this year’s equity issuance.
FIBRA INN’s ADR’s rose 9.8% YoY to MXN$1,910 in November. However, such ADR adjustment, coupled with traveler caution, generated a 2.6 percentage point reduction in average daily occupancy levels to 67.4%. For these reasons, RevPar was up 5.7% YoY to MXN$1,287, and hotel revenues grew 7.3% YoY to MXN$218.3 million.
LASITE announced it successfully raised MXN$3.0 billion in new equity after having sold 1 billion shares (100% of shares offered) at a subscription price of MNX$3.00 each.
CONSORCIO ARA appointed Miguel Guillermo Lozano Pardinas as the new CEO of its housing division. Mr. Lozano has worked at ARA since 2007 in various positions, the most recent one being Managing Director of Operations. He will replace Mr. Germán Ahumada Russek, who led the housing unit for 48 years.
WALGREENS BOOTS ALLIANCE, the controlling shareholder of FARMACIAS BENAVIDES, is in talks to be acquired by a private equity firm Sycamore Partners, according to international newswires. This is expected to lead to a breaak up of the company, and thus the possible sale of Mexican operations.
ALEATICA submitted a request to the CNBV to cancel the listing of its shares on the MSE.
OTHER COMPANIES
BANAMEX will carry out a dual offering in Mexico and the United States in 2025, according to Marcos Martínez, Chairman of the Mexican Stock Exchange (BMV).
PLATA CARD obtained authorization from the CNBV to incorporate as a bank. Fintechs Mercado Pago, Nu Mexico and Klar are in the process of requesting their own bank licenses. Brokerage house MASARI has also requested a bank license, according to local newswires.
Crypto trading platform BITSO’s total global customers increased 12.5% in 2024 to 9 million, of which 70% are located in Mexico. The company sees attractive growth opportunities in Mexico as a result of nearshoring.
AEROMEXICO’s passenger traffic was up 0.3% YoY to 2.0 million in November, which included a 6.1% increase in domestic traffic and a 16.9% rise in international traffic. Available seat kilometers (ASK’s) were 7.1% higher, while the load factor improved 1.6 PP to 85.3%.
VIVAEROBUS’ passenger traffic increased 13.5% YoY to 2.5 million in November, resulting from an 11.4% rise in domestic traffic and 33.6% in international traffic.
GRUPO FALABELLA plans to open five new branches of Sodimac, a home improvement retailer, in Mexico during 2025, according to Chile’s Diario Financiero. The company plans to invest US$650 million next year to expand its supermarket operations in Chile, Perú and Sodimac in Mexico, representing 30% growth.
The Financial Times reported that HSBC’s new CEO may be re-considering the extent its global retail banking footprint, with some analysts suggesting the Mexican retail operations may therefore come up for sale or be downsized. This strategic shift aims to cut costs and focus on wealthier “premier” clients rather than broader consumer markets. HSBC has a complex history in Mexico, including a $2bn fine in 2012 for money laundering issues involving drug cartels, with the bank historically struggling to compete with larger local banks, despite recent improvements in profitability.
TRADE AND ECONOMICS
With 353 votes in favor and 128 against, the Chamber of Deputies “fast-tracked” the 2025 Federal Expense Budget in a 13-hour session. It included MXN$9.3 trillion in total expenditures, down 1.9% YoY in real terms. It will be financed with MXN$8.06 trillion in budgetary revenues and the rest with additional debt. Legislators reclassified MXN$44.4 billion from the original budget proposal with 62% of cuts being concentrated at the National Electoral Institute and the Judiciary, while additional funds were channeled to public universities, highways and culture.
The inflation rate was 0.44% in November, according to INEGI, which was slightly below the 0.49% consensus estimate according to the Citibanamex expectations survey and the 0.55% reported in October. It was the lowest level for a similar month in the last four years. Non-core inflation was up 1.73% for the month, boosted by a 4.04% rise in energetic prices due to the cancellation of electricity subsidies in various states. However, the core inflation rate increased only 0.05% (vs. consensus of +0.07%) in November helped by a 0.7% decline in non-food merchandise, deriving from the “El Buen Fin” promotional campaign, which partially offset a 0.35% rise in service prices. As a result, the last twelve-month inflation rate was 4.55% in November (the lowest level in the last 8 months), from 4.76% in October, while the non-core inflation rate stood at 3.58% (the lowest reading since April 2020), from 3.80% in October. These figures provide some leeway for the central bank to continue reducing its key interest rate.
The Consumer Confidence Index decreased 1.8 points to 47.7 in November, from October’s peak level, based on seasonally adjusted data. It was dragged down by the “Expected situation of the country in the next 12 months” component, which fell 3.4 pts, and the “Expected situation of household members in the next 12 months” component, which was down 2.2 points.
ANTAD reported that SSS sales increased 4.9% YoY while total sales rose 7.6% YoY to MXN$158.6 billion in nominal terms in November. This compares against October’s +1.7% in SSS and +4.3% in total sales. ANTAD also said that total sales during “El Buen Fin” promotional period (November 15-18th) grew 9.8% YoY to MXN$44.8 billion.
Industrial activity declined 1.2% MoM (seasonally adjusted) in October, affected by a 1.9% contraction in both manufacturing and mining activities, INEGI reported. Industrial activity decreased 2.2% YoY (original data) mainly as a result of an 8.5% fall in construction (with civil engineering down 32.9%) and a 6.9% decline in mining.
Light vehicle production was up 6.7% YoY to 351,535 units in November, while exports advanced 2.9% YoY to 289,309 units.
Total tourists increased 26.6% YoY to 7.48 million in October, according to INEGI. Total expenditures grew 10.4% YoY to US$2.2 billion as the average expenditure per tourist declined 12.8% to US$298.6.
COFECE has launched an investigation into key live entertainment markets in Mexico. The regulatory body said the investigation will last between 30 and 120 business days, although it can extend such period up to two times if it deems necessary.
CETES auction: 29-day CETES +5bps to 9.95%; 92-day CETES -8 bps to 9.80%; 183-day CETES -14 bps to 9.85% and 365-day CETES -34 bps to 9.86%.
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