Markets
The IPC index of Mexico’s top 35 stocks closed February 23 at 53,085.71, down -1.72% from its February 16 close of 54,015.82. The +9.54% year-to-date increase in the IPC compares favorably to S&P500’s +4.50% increase.
The MXN/USD exchange rate closed at 18.37 pesos to the dollar on February 23, from 18.52 pesos on February 16, continuing its amazing strength.
The Mexican 10-year bond (2031) closed Thursday with the yield at 9.29% up from 9.04% on February 16.
The IPC Top Stock Gainers for the week were: ORBIA (+3.80%), GRUMAB (+2.76%) and KOFUBL (+2.10%) and the Biggest Losers were: LABB (-10.98%), CUERVO (-6.97%) and BOLSAA (-6.36%).
Corporate & Market News
Chedraui unveiled its annual expansion plans, announcing that it would contemplate opening six new Chedraui stores, three Super Chedrauis and 50 Supercitos in Mexico, while in the United States, it was considering opening three Smart & Finals and one El Súper. In 2022, the conglomerate’s net profits increased by 77.4% reaching 6.176 billion pesos in part due to its acquisition of Arteli.
TelevisaUnivision announced that its streaming platform Vix had reached more than 25 million monthly subscribers in its commercials-included version after its mid-2022 launch. TelevisaUnivision hopes that the platform, which highlights its Spanish-language content, will reach profitability by the end of 2023.
NGO Carbon Disclosure Project recognized Grupo Bimbo for its progress in fighting climate change, awarding the company an A rating, with which the conglomerate joins a select list of 15,000 global companies. Grupo Bimbo aims to be carbon neutral by 2050.
Jetour, a Chinese auto manufacturing business announced it would open 30 distribution points in Mexico and that it hoped to sell 20,000 cars in Mexico this year alone, beginning with its X70 and X70 plus models. The company is also reportedly evaluating a 1 billion dollar investment in México to build a new assembly plant in a northern Mexican state.
The annual and fourth quarter 2022 earnings season drew to a close. With over 90% of companies reporting, GBM estimated that overall sales for listed Mexican companies grew by 8.2%, and EBITDA by 4.9%, in line with expectations. Televisa reported mixed results, with EBITDA down by 8.9% due to poor numbers at SKY. KOF once again bested estimates, with EBITDA up 12.3%. Grupo Bimbo reported record sales in 2022 and net profits of 48.48 billion pesos, more than double its 2021 annual profit reported, with 4Q22 EBITDA up 12%. Elektra registered a net loss of 7.353 billion pesos in 2022; according to the company, this reflects the decrease in the market value of underlying financial instruments owned by the company, rather than a cash flow problem. La Comer grew slower than its primary competitors Walmart and Soriana but still reported a 15.1% increase in y-o-y sales during 4Q22 and an impressive 45% in EBITDA as gross margins expanded. Genomma Lab reported a 17.4% increase in profits during 4Q22 despite higher inflation, due to an increase in sales of OTC drugs.
Politics
Former Security Minister Genaro García Luna was convicted by a U.S. jury of drug trafficking, taking millions in bribes from the Sinaloa drug cartel during the administration of President Felipe Calderón. According to the U.S. Department of Justice, he could face up to life in prison and will serve a minimum of 20 years behind bars. He is the highest-ranking Mexican official to ever be tried, and convicted, in the United States.
The Mexican Senate, dominated by the Morena party, approved a reform to the country’s electoral institute, drastically cutting its budget and undermining the autonomy of the agency. The electoral agency has said that the budget cuts will threaten its ability to install voting stations throughout the country, while President Andrés Manuel López Obrador maintains the measure will cut unnecessary costs. The reform is expected to be challenged before the Supreme Court. Large-scale protests are planned on Sunday.
Trade & Economics
During a trip to the state of Sonora, President Andrés Manuel López Obrador took additional steps to implement the decree passed into law last April to national lithium. The President signed additional decrees to demarcate state-controlled lithium reserves and to designate the country’s energy ministry as the coordinator of the lithium sector. The specific implications of the decrees, however, remain unclear.
Annual inflation in mid-February slowed to 7.76% from 7.91%, raising hopes that the interest rate tightening cycle might end after March’s Central Bank meeting, when a 25bps increase to 11.25% is expected. The mighty Mexican Peso is helping contain inflationary pressures.
News About Mexico in the Foreign Press
Mexico Senate Passes Electoral System Overhaul Ahead of Vote
22/02/2023, Bloomberg, Jose Orozco y Alex Vasquez
Mexico Congress approves law giving armed forces airspace monitoring duties
22/02/2023, Reuters, Staff
Mexican president hopes ex security chief will turn informer
22/02/2023, The Washington Post, Associated Press
Mexico president flags water-scarcity of northern state eyed for Tesla plant
20/02/2023, Reuters, Staff
Why ‘Made in China’ Is Becoming ‘Made in Mexico’
21/02/2023, The New York Times, Stella Tan
Mexico's Lopez Obrador orders ministry to step up lithium nationalization
18/02/2023, Reuters, Staff