MARKETS
The IPC index of Mexico’s top 35 stocks closed on March 2 at 53,329.53, up 0.46% from its February 23 close at 53,085.71. The +10.04% year-to-date increase in the IPC compares favorably to S&P500’s +3.69% increase.
The MXN/USD exchange rate closed at 18.12 pesos to the dollar on March 2, from 18.39 pesos on February 23, continuing to gain strength.
The Mexican 10-year bond (2031) closed on Thursday with the yield at 9.382% up from 9.29% on February 23.
The IPC Top Stock Gainers for the week were: CEMEX (+7.81%), Q (+3.49%) and GRUMA (+3.42%) and the Biggest Losers were: MEGACABLE (-10.47%),TELEVISA (-9.35%) and ALSEA (-6.82%).
CORPORATE & MARKET NEWS
During Tesla’s Investor Day, Elon Musk confirmed that the company would build a new factory in Nuevo León, expected to be the largest electric car factory in the world, to complement existing facilities. According to Nuevo León Governor Samuel García, the plant could be ready in less than nine months. The federal government has estimated that the investment will be around US$ 5 billion.
GISSA completed the sale of Vitromex, its construction business, to Mohawk Industries for US$299 million.
DHL will invest US$ 54.5 million in 2023 to transfer its cargo operations to the Felipe Ángeles International Airport (AIFA) from the Mexico City International Airport (AICM). The investment will allow DHL to expand its operations and increase its operational capacity from the AIFA with the construction of security equipment and customs facilities as well as the opening of new routes.
Alpek announced that it would close a PET resin plant in the United States located in South Carolina. The plant was constructed in the seventies to produce 170 thousand tons of PET resin. The decision will allow Alpek to reduce its costs by approximately US$ 20 million dollars a year and improve the overall utilization of its remaining capacity.
Konfío received an extension to its existing credit lines with Goldman Sachs and Gramercy totaling US$ 226 million, with an extension period of 2 years. With the additionalfunding, Konfío plans to grant 10,000 new loans ranging between 150,000 and 3 million pesos.
Mexican companies completed their 4Q22 earnings reports. According to GBM, sales for their sample in the quarter were up 8.6% (versus an estimated 9.4%) and EBITDA was up by 5% (versus 3.1% estimated). According to Santander, weighted MexBol sales grew by 10% and EBITDA also by 10%, ex financials.
POLITICS
Tens of thousands participated in protests on Sunday against the proposed changes to the country’s National Electoral Institute (INE). The Supreme Court has admitted a challenge to the reforms which alleges they infringe upon the body’s powers. The budget cuts and other changes have raised concerns over Mexico’s ability to conduct free and fair elections.
President López Obrador said that his flagship project the Tren Maya would be completed by December 1 for the fifth anniversary of his swearing-in ceremony. He added that Pemex was working to provide fuel for the train and added that they would increase the energy supply of the region, without giving more details.
TRADE & ECONOMICS
The Bank of Mexico adjusted its GDP growth forecasts for 2023 to 1.6% from 1.8% and for 2024 down from 2.1% to 1.8%. It projects inflation to reach 4.9% in 2023, and to return to its target of 3%, plus or minus a percentage point, by 2024. Relatedly, the central bank also adjusted its GDP growth forecasts for 2023 down to 1.6% from 1.8% and for 2024 down from 2.1% to 1.8%.
Remittances in January climbed to a record US$ 4.4 billion for that month — and a record US$ 59.0 billion on a twelve-month basis.
Mexico reported a trade deficit of just US$ 4.1 billion in January, and despite the Super Peso, exports rose by an impressive 25.6% to US$ 42.6 billion, and imports by 16.3% to US$ 46.7 billion. The nearshoring trends are clearly at work.
A senior US trade official said that they were considering all options, including a USCMA trade dispute panel, unless Mexico addressed Washington’s concerns related to the country’s plans to limit the imports of genetically modified corn. The statement comes following talks between USTR Katherine Tai and Mexican Economy Raquel Buenrostro on Friday.
NEWS ABOUT MEXICO IN THE FOREIGN PRESS
Mexico’s AMLO to Blinken: Mind your own democracy
01/03/2023, The Washington Post, Olivier Knox y Caroline Anders
Why Mexico’s Protests Show Anxiety on AMLO and Democracy
01/03/2023, The Washington Post, Maya Averbuch
US looking at 'all options' over corn dispute with Mexico, says official
01/03/2023, Reuters, Andrea Shalal
Mexico Is Flashing Warning Signals to Washington
28/02/2023, The Washington Post, Eduardo Porter/ Bloomberg
Exclusive: Mexico's Pemex increased gas flaring at top field, despite pledge to stop
28/02/2023, Reuters, Stefanie Eschenbacher
U.S. requests extradition of Ovidio Guzman, son of 'El Chapo', from Mexico -sources
27/02/2023, Reuters, Lizbeth Diaz
Analysis: Decree adds to doubts about Mexican lithium industry's future
24/02/2023, Reuters, Carolina Pulice