MARKETS
The IPC index of Mexico’s top 35 stocks closed on March 16 at 52,505.70, down -1.72% from its March 9 close at53,426.77. The +8.34% year-to-date increase in the IPC compares favorably to S&P500’s +3.15% increase.
The MXN/USD exchange rate closed at 18.74 pesos to the dollar on March 16, up from 18.36 pesos on March 9.
The Mexican 10-year bond (2031) closed on Thursday with the yield at 9.11% from 9.15% on March 9.
The IPC Top Stock Gainers for the week were: PENOLES (+7.35%), BOLSAA (+5.22%) and OMAB (+5.05%) and the Biggest Losers were: BBAJIOO (-14.01%), RA (-13.22%) and VOLARIS (-11.74%).
CORPORATE & MARKET NEWS
Grupo México announced an offer for the remaining shares of Planigrupo LatAm from March 14 until April 13. Planigrupo specializes in the construction, commercialization and administration of shopping malls in Mexico; it currently has a portfolio of 36 properties in 18 states.
Bachoco’s control group bought another 8% of the company at P92.0, bringing its total stake to 95.7%, thereby permitting the de-listing of Mexico’s dominant poultry business and putting an end to a very public fight between activists and controllers. The stock purchase follows the control group’s tender offer for 27% of the company it did not own at P81.22 in October 2022. This was partially accepted and raised the control group ownership to 88% from 69% but was firmly and publicly rejected as far too low by certain activist shareholders. By holding out, the activists have pocketed an extra 12% - kudos to them. But the valuation was still low by international standards. Investors who accepted the first tender must be kicking themselves.
U.S. automaker General Motors agreed to increase salaries by 10% this year at its largest Mexican factory, resolving a dispute between the Silao Union SINTTIA and the company. SINTTIA is the first independent union in the plant’s history after workers ousted their former labor representatives last year, opening the possibility of larger pay raises.
GCC, a Mexican cement producer with operations in Mexico and the United States, announced that it had reached a settlement agreement with Compañía de Inversiones Mercantiles (CIMSA), ending an 11-year dispute which first began over the sale of shares of a third company in which the companies were partners.
Walmart de México announced that it would hold its General Shareholders’ meeting on March 30 and seek approval for a dividend of 1.12 pesos per ordinary share and 1.57 pesos for extraordinary shares, for a total dividend of 2.69 pesos per share.
Mexico Infrastructure Partners, sponsor of FEXI (the toll road Fibra-E), issued FSOCIAL 23, a new FIBRA-E with a 98% stake in two federal prisons. FEXI meanwhile paid out a distribution of P$582 million.
POLITICS
President Andrés Manuel López Obrador vetoed the Senate’s appointments of Ana Yadira Alarcón and Rafael LunaAlviso who were put forth by the Senate as commissioners for the National Institute of Transparency, Access to Information and Protection of Personal Data (INAI). The veto could make the commission inoperable, as another commissioner’s term is expected to conclude on March 31, potentially leaving the body without the necessary quorum to conduct business. In response, the current commissioners said that they would bring the matter before the country’s supreme court.
Mexico’s Attorney General said it had detained Carlos Antonio Dávila Amerena, the former legal director of theMexican Food Security Agency (Segalmex), a dependency of the Secretary of Agriculture and Rural Development, for organized criminal activity, money laundering and embezzlement related to thousands of tons of sugar that were never received. The Attorney General has reportedly issued 22 arrest warrants related to the case.
Felipe Calderón finally spoke out about the case against his former Secretary of Public Security, Genaro García Luna, saying he questioned the guilty verdict given that all the evidence came from the testimony of criminals and accused the government of Andrés Manuel López Obrador of politically persecuting him. On February 21, García Luna was found guilty of conspiracy to distribute cocaine internationally, in addition to four other charges, and was sentenced to life in prison.
TRADE & ECONOMICS
Mexico's industrial production was largely unchanged MOM in January but grew by 2.5% YOY.
The Mexican Association of Banks (ABM) that the country’s banking system had not been affected by Silicon Valley Bank’s collapse. Nonetheless, shares of Mexico’s largest banks, just as with banks elsewhere in the world, have been negatively impacted in the last few days due to general concern about the banking sector and a rise in risk aversion.
The Mexican government presented a formal appeal before the District Court of Massachusetts after the courtrejected the civil action against U.S.-based firearms manufacturers and distributors. The Mexican governmentoriginally filed the civil lawsuit in August 2021, alleging that the manufacturers had been careless and negligent, actively facilitating arms trafficking into Mexico.
Rafael Zaga, President of Mexico’s Textile Industry Association Canaintex, said that nearshoring and problems with Asian supply chains had allowed Mexico to grow and expand its textile exports, which reached US$ 1.664 billion in 2022, the highest figure observed during the last decade and an 18% increase in exports over the previous year. 80% of Mexico’s textile exports go to the United States.
NEWS ABOUT MEXICO IN THE FOREIGN PRESS
Mexico finds 'serious irregularities' in labor probe at VU Manufacturing
16/03/2023, Reuters, Staff
Global Banking Turmoil Threatens to Topple Mexico’s ‘Super Peso’
16/03/2023, Bloomberg, Davison Santana
US issues travel alert for Spring breakers in Mexico
15/03/2023, The Washington Post, Associated Press
Mexican president floats banning use of medicinal fentanyl
15/03/2023, Reuters, Staff
Hollywood Is Also Getting Into Mexico’s Nearshoring Boom
15/03/2023, Bloomberg, Michael O'Boyle
U.S., Mexico officials speak ahead of meeting on drugs, arms trafficking
14/03/2023, Reuters, Staff
Mexican president floats banning use of medicinal fentanyl
15/03/2023, Reuters, Staff
Bomb Mexico to What End? (Opinion)
12/03/2023, The Wall Street Journal, Mary Anastasia O’Grady
Mexico kidnappings put a spotlight on medical tourism
10/03/2023, The Washington Post, Frances Stead Sellers/ Mary Beth Sheridan/ Lenny Bernstein/ Natalie Compton
Mexico's legal cannabis business takes next step with CBD-focused firm
09/03/2023, Reuters, Diego Oré