Weekly Mexico Market Monitor

noviembre 17, 2023
9:12 am

Weekly Mexico Market Monitor

Friday AM, November 17, 2023

MARKETS

The FTSE-BIVA index closed on November 16 at 1085.21 slightly up from its November 9 close at 1056.82.

The MXN/USD exchange rate strengthened to 17.23 pesos to the dollar on November 16, from its close of 17.82 pesos on November 9.

The Mexican 10-year bond (2031) closed on Thursday with a yield of 9.396%, down slightly from a yield of 9.671% on November 9.

The FTSE-BIVA Top Stock Gainers for the week were: SITES1 MM (+10.99%), NEMAK (+10.54%) and CARSO (+9.10%) and the Biggest Losers were: CUERVO (-6.87%), GENTERA (-4.09%) and TELEVISA (-3.64%).

CORPORATE & MARKET NEWS

Fibra Next announced that it would seek up to 15 billion pesos (US $865 million) for its IPO which is set to launch November 28 on the Mexican stock exchange. This signals a strong market for the real estate investment trust focusing on properties set to benefit from nearshoring.

Lego, the toy manufacturer, will invest more than US $200 million to expand its plant in the state of Nuevo León, as reported by the state government.

Following Nubank’s announcement of a 15% yield on its savers account, Argentina’s Ualá responded by raising its own interest rates to the same figure, in a growing battle for Mexican customers in the fintech sector.

Nexxus Capital, a Mexican private equity fund management company, said its subsidiary Nexxus Iberia has already received authorizations from the Spanish regulatory agency, the CNMV, to be able to operate its second fund in Spain. It already has €230 million committed.

Bimbo has announced that in 27 out of the 34 countries where it operates, it now uses 100% renewable electricity, covering 92% of its global electricity demand. The company plans to transition to 100% renewable energy by 2025.

Valeo will invest more than $2.8 billion pesos to expand its technical development center in Querétaro. The French company, which already employs more than 12,000 people in Mexico, produces various systems and components for the automotive industry.

VITRO proposed a complex restructuring plan, in which it plans to transfer its Automotive, 75% of Architectural, and 51% of Glass Containers divisions to Vitro Int.. Post-restructuring, VITRO shareholders WOULD retain full ownership of the Chemical division and minority interests in Architectural and Glass Containers.

Auteco, a Colombian company, is planning to invest US $100 million in a last-mile electric vehicle factory in Mexico. The specific location has not yet been defined.

POLITICS

President Andres Manuel López Obrador proposed three hard-line MORENA supporters —Bertha Alcalde Luján, Lenia Batres Guadarrama, and María Estela Ríos González— to replace Arturo Zaldívar as Supreme Court Justice. The Senate must approve one of these candidates by a two-thirds majority, and if not, the President needs to submit a second list of three candidates. If there is still no agreement, the President can pick who he prefers from this second list.

Jesús Ociel Baena, Mexico’s first non-binary magistrate and one of the first to receive a non-binary passport, was found dead along with their partner at home this week. The circumstances around their death remain unclear, with calls for further investigation following reports stating it may have been a murder-suicide committed by their partner. Their death has led to widespread vigils and tributes across the country to a leading voice and campaigner for LGBTI+ rights in Mexico.

Morena picked the mayor of Iztapalapa and two-time congresswoman, Clara Brugada, as the party’s candidate for next years mayoral elections in Mexico. She was chosen despite more centrist Omar Garcia Harfuch coming ahead in the polls due to mandated gender quotas.

The bill to amend the Securities Market Law was approved by Mexico’s Lower House of Congress, following Senate approval earlier this year. This reform makes it easier for small and medium-sized enterprises to access equity and debt markets by cutting red-tape. The CNBV now has one year to implement secondary regulations necessary to enforce this reform.

TRADE & ECONOMICS

The Mexican government renewed for two years a flexible credit line it has with the International Monetary Fund, a protection tool in the event of a severe financial shock. The Foreign Exchange Commission ensured the continued availability of around US $35 billion of IMF credit, a reduction of US $15 billion from the previous contract. This funding has never been used.

Private consumption in Mexico decreased 0.1% monthly in October and cut a streak of four months of growth, according to the National Institute of Statistics and Geography’s Timely Indicator of Private Consumption. Meanwhile, ANTAD’s same-store sales slowed in October as department stores lagged. Same-Store Sales: Total +2.9%; Self-Service; +6.2%; Department +0.3%; Specialized +1.6%.

According to the Federal Telecommunications Institute, at the close of March there were around 26 million contracts for (fixed) internet service – 50% more than in 2018. In the country there are already more than 62 contracts for every 100 households.