MARKETS
The S&P / BMV IPC posted another negative week, slipping 0.7% to close at 50,174.64 pts, as an overall bearish sentiment prevailed following SOFT 3Q EARNINGS, Trump’s cabinet picks and implementation of Plan-C. Meanwhile, the Mexican peso continued to hover above the psychological level of MXN$20, closing at MXN$20.42 per US$. The yield of the Mexican 10-year M-Bono was down marginally, -3 bps to 9.96%.
The S&P / BMV IPC’s top stock gainers for the week were: PEÑOLES * (+6.6%), bouncing back after leading losses last week, PINFRA * (+5.1%) and BOLSA A (+2.8%). The index’s biggest losers were: TLEVISA CPO (-6.9%), widening its losses over the past month to -13.6%, ALFA A (-5.8%), and WALMEX * (-5.7%).
Next week, we expect the following macroeconomic indicators: trade balance, monetary policy minutes, and fiscal balance.
LISTED COMPANIES
FUNO’s plans to spin off its industrial portfolio will resume at the end of the 1Q25, according to Gonzalo Robina, deputy CEO, during the Investor Day. It could be done through Fibra Next (FUNO expects to receive approval in the short-term from the SAT to create the new Fibra) or through a non-Fibra vehicle like Vesta.
PINFRA announced a preliminary agreement with Terminal Investment Limited (TIL) regarding the Port of Altamira. TIL manages 70+ terminals globally. Details are pending, with negotiations and regulatory approvals ongoing. Altamira, recently expanded to handle 476,000 containers and 307,000 vehicles, contributes ~6% of PINFRA’s EBITDA.
Mercado Libre achieved record-breaking results during Buen Fin 2024, with over 100M sessions and the highest number of new user registrations, 31M verified offers, flexible credit options. WALMEX also reported record sales, with double-digit growth, 72M in-store transactions, 170M online visits, and a 40% increase in app downloads. Deliveries doubled compared to 2023.
SANTANDER’s Openbank has officially launched in Mexico, offering an attractive 12.5% yield on deposits to compete directly with Nu and other fintechs. This marks an aggressive move by Santander and contrasts with Banorte’s weaker deposit yield offering from Bineo, which offers a yield equal to 75% of CETES. Openbank’s CEO is the Argentine Matías Nuñez, a veteran of Santander in Argentina, Spain, and for the past eight years, Mexico.
NORTE 19’s ADR of its 152 hotels (consolidated and managed) increased 9.8% YoY to MXN$1,366, exceeding the inflation rate by 5.0 percentage points and establishing a new historical high. This, in conjunction with a 1.9 PP improvement in occupancy levels to 58.8%, boosted the RevPar by 13.6% to MXN$804. Consolidated revenues grew 11.0% YoY to MXN$349.8 million.
ALSEA plans to invest MXN$450 million to open 75 Domino’s Pizza brand stores in Mexico this year, in order to close with 975 units.
FMTY has used the MXN$62.9 million cash flow surplus corresponding to 3Q24 to buy-back certificates, as previously announced in its last quarterly press release.
GFNORTE’s bank subsidiary has successfully issued US$1.5 billion in Perpetual Callable Subordinated Non-Preferred Non-Cumulative Tier 1 Capital Notes in international markets. The notes were rated by Moody’s and S&P Ba2 and BB-, respectively. The Capital Notes are Basel III-compliant. On the other hand, GFNORTE’s shareholders approved the cancellation of 70.3 million Series “O”, Class II, common shares that were acquired through the Buyback Program.
OMA raised MXN$600 million in short-term loans with HSBC Mexico, Banco Santander Mexico and Scotiabank Mexico. The company will use proceeds for working capital needs and to strengthen its liquidity position. The loans carry an average weighted annual interest rate of TIIE 28 plus 60 bps.
LASITE announced that the preferred subscription with No public offer began on November 15th and will conclude on November 29th. The company plans to raise MXN$3.0 billion by issuing 1 billion new shares at MXN$3.0 each. On the other hand, LASITE issued US$650 million in 5-year bonds with a 6.0% coupon. Its subsidiaries Torres Latinoamérica, S.A. de C.V. and Torres do Brasil, S.A. guarantee such instruments. The company will use proceeds to refinance existing debt.
VINTE issued a 7-year MXN$500 million sustainable bond with a 240 bps fixed spread over the 7-year M-Bono. The company will use proceeds to develop sustainable communities. This was VINTE’s sixth sustainable bond issuance. Meanwhile, VINTE secured financing from the International Finance Corporation for green housing projects, including for its tender offer to acquire JAVER.
AUTLAN obtained a US$160 million syndicated loan, divided into two tranches: i) a US$130 million portion with a 7-year maturity and two-year grace period; and, ii) a US$40 million revolving working capital line (with a portion denominated in pesos). The company will use proceeds to refinance existing debt and other various liabilities.
FIBRAPL extended its exchange offer for TERRAFINA’s CBFI’s to November 22nd.
OTHER COMPANIES
NETFLIX will increase prices by up to 20% in all its plans in Mexico, according to local newswires.
GLOBALSTAR won the bid to offer the complementary terrestrial mobile satellite service in Mexico in the 2483.5 to 2495 MHz band for a 10- year period, in exchange for a MXN$82.1 million.
SIX FLAGS expects to invest more than US$1.0 billion during the next two years to modernize 42 amusement parks in North America, which will include the construction of a new Boomerang Thrill Coaster in its Mexico City site.
HYUNDAI MOTOR and GENERAL MOTORS are considering a JV to develop pickups aimed at the Latin American market
TRADE AND ECONOMICS
The Mexican Government released the 2025 Economic Package which includes a reduction in the public deficit to 3.9% of GDP (from 5.9% in 2024), based on an optimistic GDP growth forecast of between 2.0-3.0% (from 1.5-2.5% in 2024) which is above the 1.0% consensus according to the last Citibanamex survey, an inflation rate of 3.5% in 2025 (from 4.3% in 2024), a YE FX rate of MXN$18.50/US$ (from MXN$19.70/US$ in 2024), 28-day CETES rates of 8.0% (from 10.0% in 2024) and an average price for the Mexican oil mix of US$57.8/barrel (from US$70.7/barrel in 2024) with a production platform of 1.891 million oil barrels per day (from 1.877 million of bpd in 2024). Government revenues are forecast to climb 3.3% in real terms to MX$8.0 billion supported by GDP growth and fiscal efficiency and digitalization, which includes a 2.6% real increase in tax revenues to MXN$5.3 billion, representing 14.6% of GDP. Government expenditures are expected to be down 1.9% real to MXN$9.4 billion, with the main budget reductions concentrated in Defense (-43.8%), Semarnat (-39.4%), Security (-36.2%), Health (-34.0%), Culture (-30.8%) and Energy (-20.9%); however, it should be noted that some of the major reductions are actually related to reallocations (e.g., hospitals that IMSS-Bienestar is taking over from the Health Ministry); on the other hand, Development will rise 183.3%, Infraestructure +57.6% and Wellbeing 2.3%. The government’s debt as a percentage of GPD will stabilize at 51.4% in 2025. There will be no new taxes nor increases in existing ones in real terms. The 2025 Fiscal Package will increase mining royalties. The Special Right on Mining will rise to 8.5%, from 7.5%, while the Extraordinary Tax on Mining for precious metals to 1.0%, from 0.5%.
3Q24 GDP growth was revised upwards to 1.1% QoQ, from a preliminary reading of +1.0%, accelerating from the 0.2% increase in 2Q24 and the 0.1% rise in 1Q24. It was driven mainly by a 4.9% QoQ increase in primary activities, +1.1% in tertiary activities and +0.9% in tertiary activities. GDP was up 1.6% YoY based on original data.
Expectations for a rate cut in December rose as inflation for the first half of November increased by a lower than expected 0.37% (below consensus of 0.48% according to the Citibanamex Expectations Survey), bringing 12 month inflation to 4.56%. The period’s inflation rate was driven mainly by a 1.44% surge in non-core prices which were boosted by a 3.74% hike in energy prices. Core inflation was 0.04% (vs. the 0.17% expectation) in the first half of November, with service prices up 0.22% and merchandises falling 0.14%, bringing the last 12-month core inflation rate to 3.58%.
IGAE grew 0.2% MoM in September based on INEGI’s seasonally adjusted data. This included a 1.3% MoM increase in primary activities and 0.6% in secondary ones, which was partially offset by a 0.1% decline in tertiary activities. According to original data, IGAE advanced 0.3% YoY supported by a 1.2% rise in primary activities and 0.6% in tertiary ones, while secondary activities fell 0.4%.
Most economists expect a 25 bps cut in Banco de Mexico’s key interest rate in the December monetary policy meeting, according to the November 20th Citibanamex Expectations Survey, with slowing growth and good inflation numbers driving the decision. The median estimate for the benchmark interest rate remained at 10.00% for YE24 and 8.00% for YE25. They also forecast an inflation rate of 4.45% (from the previous estimate of 4.41%) in 2024 and 3.80% (from 3.81%) in 2025, a core inflation rate of 3.75% (from 3.80%) in 2024 and 3.70% (unchanged) in 2025; an FX rate of MXN$20.0/US$ (from MXN$19.80/US$) in 2024 and MXN$20.50/US$ (from MXN$20.21/US$) in 2025, and a stable GDP growth of 1.5% and 1.0%, respectively.
Retail sales were up 0.1% (in line with consensus) in real terms in September, while employees fell 0.4% and average real remunerations rose 0.2% MoM, according to INEGI’s seasonally adjusted data. With original data, retail sales were down 1.5% YoY (vs. the -1.2% consensus fall), while employees declined 0.9% YoY and average real remuneration rose 6.1% YoY. This was the fifth consecutive annual reduction in retail sales.
The IGAE is expected to increase 0.3% YoY in September and 0.4% YoY in October, according to INEGI’s Opportunistic Indicator of Economic Activity. Secondary activities will remain stable in September and will likely fall 1.3% in October, while tertiary activities will likely rise 0.4% in September and 1.1% in October.
Moody’s cut its GDP growth estimates for Mexico to 1.5% (from 2.4%) in 2024 and to 1.3% (from 1.5%) in 2025 citing high interest rates and a rebound in smaller Latin American economies.
Occupied personnel was down 0.1% MoM, the number of hours worked declined 0.2% MoM and the average real remuneration fell 1.3% MoM according to INEGI’s seasonally adjusted manufacturing indicators. According to original data, occupied personnel decreased 1.6% YoY (the 14th month in a row with an annual contraction), the number of hours worked 3.2% YoY and average real remuneration 1.9% YoY.
With 347 votes in favor and 128 against, the Chamber of Deputies approved the elimination of 7 independent regulatory agencies, including INAI, Cofece, IFT, Coneval, CRE, CNH, and Mejoredu. However, President Claudia Sheinbaum announced the creation of a new independent agency which will substitute Cofece and IFT, to comply with the USMCA. The measure will now be discussed in the Senate.
New foreign investment increased 133% QoQ to US$2.1 billion in 3Q24, according to Economy Ministry Marcelo Ebrard.
CETES auction: 28-day CETES -5bps to 10.05%; 91-day CETES -24 bps to 10.10%; 175-day CETES -15 bps to 10.21% and 679-day CETES -38 bps to 10.39%.
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