MARKETS
The IPC (top 35 Mexican stocks) closed the past 7 days at 52,016.61, up +1.2% from its close of 51,393.58 pesos on November 17. For the year, the IPC has dropped –2.36%, outperforming the S&P500 (-15.50% YTD).
The MXN/USD exchange rate closed at 19.39 pesos to the dollar, up from 19.41 pesos on November 17.
The Mexican 10-year bond (2031) closed at a yield of 9.09%, down from 9.24%, on November 17.
The IPC Top Stock Gainers for the week were: WALMEX* (+3.89%), PE&OLES (+3.64%), and GRUMAB (+3.365), and the Biggest Losers were: GMEXICOB (-4.24%), GCARSOA1 (-2.5%), and ORBIA* (-2.08%).
CORPORATE & MARKET NEWS
Grupo Financiero Inbursa, the financial arm of Mexican tycoon Carlos Slim's group of companies, has withdrawn from the bidding process to acquire Citibanamex's Mexican assets. In a statement, the Company said, "Inbursa confirms that following its non-binding proposal for the acquisition of said businesses, the parties mutually agreed that Inbursa will not continue in the following stages of the process.”
Nu México, a subsidiary of the Brazilian independent digital bank Nubank, is expanding its product portfolio in the country with plans to gradually integrate a new savings account product to better compete with traditional banks, with the account operated through Nu México’s non-banking financial institution, or Sociedad Financiera Popular (Sofipo), dubbed Nu Mexico Financiera, though formerly known as Akala. Clients will be offered the option in a series of phases, with preference given to those on a company wait list.
Grupo Carso, as part of a process to de-list its restaurant and retail chain subsidiary Sanborns is attempting to buy up the remaining 13% in equity still in the hands of minority investors. Carso is offering $26 pesos per share of stock for the outstanding $297 million shares, offering a premium over the current stock price just above $24 pesos. The offer will stand until at least December 22 with an option to extend the deadline.
In a similar move, IFM Investors, the principal backers of Mexican highway concessionaire Aleática look to purchase 14% of capital stock from minority shareholders for $37 pesos per share, above the $34.9 pesos in late trading November 24. IFM has yet to release dates.
From January to September 2022, Pemex Refining lost 223 million pesos on average for every 24 hours in operation. This is equivalent to a loss of 9 million pesos every hour.
América Móvil has proposed a reclassification of its shares to its owners to simplify the business’s structure and attract more potential investors.
Cemex said it is continuing its efforts to lead the transition to carbon neutrality in the construction industry by implementing new carbon capture, utilization and storage (CCUS) projects throughout its global cement operations.
Grupo Aeroméxico has entered an alliance with the RCD Foundation, a non-profit organization belonging to RCD Hotels, to improve the living conditions of vulnerable populations and promote equal opportunities in education, health and development.
Citibanamex has signed an agreement to set up correspondent banking branches at supermarket locations owned and operated by Grupo Comercial Chedraui, a major expansion of the bank’s correspondent banking branches across the country.
Grupo México is in yet another dispute with the government of President Andrés Manuel López Obrador, this time centered on the mining and construction conglomerates’ decision to terminate early its construction contract on Stretch 5 of the Maya Train project, running from Playa del Carmen to Tulum. The company owned by billionaire Germán Larrea halted work in July on what is one of the López Obrador administration's most ambitious infra projects.
Televisa will pay US$95 million for terminating a US class action related to disclosure of bribery allegations, with insurance covering all but US$21.5mn of the claim. Televisa did not accept the claims and denies any wrongdoing.
POLITICS
President Andrés Manuel López Obrador (AMLO) seems set on a watered-down version of electoral reform that avoids changing the constitution in exchange for easier passage. Details on a softer bill, which only needs simple majorities in both houses rather than the supermajorities required for constitutional reforms, remain unclear, but for sure would reduce the budget for the National Electoral Institute (INE) and thus seek to undermine its independence. The opposition plans to challenge the constitutionality of AMLO’s Plan B reforms
AMLO is set to lead a march November 27th to commemorate his fourth year since taking office and defend his proposed electoral reform package. The Morena Party leader launched a broad call to mobilize supporters as soon as the march was formally announced.
Federal competition watchdog Cofece has opened an investigation to identify and, where appropriate, determine the probable existence of barriers to competition and essential inputs in the corn distribution and marketing markets.
López Obrador also moved to suspend an upcoming summit for the Pacific Alliance, the economic bloc made up of Chile, Colombia, Peru and Mexico, due to the absence of Peruvian President Pedro Castillo, who would have been in charge of the event.
TRADE & ECONOMICS
Consumer prices in Mexico increased 0.56% in the first half of November compared to the previous 15 days, the largest two-week increase since March, leading to an annual inflation rate of 8.14%, decelerating from 8.41% YOY in October. The products that most influenced the increase in prices were a 20.29% increase in electricity and a 12.93% increase in air transportation.
Mexico’s Ministry of Economy reported FDI of US$32.1 billion in the first nine months of the year, up 30%.
Analysts from banks and brokerage firms in Mexico estimated that the Board of Governors of the Bank of Mexico will continue with its rate hike cycle trend in December, although at a slower pace than in previous months, according to the latest Citibanamex survey. According to the survey, analysts expect:
· GDP growth: 0.5% in 2022 and 0.9% in 2023
· Inflation: 8.48% in 2022 and 5.16% in 2023
· Core inflation: 8.35% in 2022 and 5.05% in 2023
· FX (year-end): P$20.0 in 2022 and P$21.0 in 2022
· Banxico interest rate +50% in the December 15th meeting
The OECD proposes three reforms to reach above a 2% growth rate by 2024 in Mexico. The reforms, which the OECD identifies as priorities, include increasing female participation in the labor market, reducing informality and improving the quality of education, said Alberto González Pandiella, acting head of the organization's division.
The Board of Governors of Banco de México is not yet ready to decouple from the monetary policy applied by the US Federal Reserve (Fed), said Jonathan Heath, one of the four deputy governors of Banco de México, in an interview with Banorte Ixe. The economist said that the decision to match the interest rate adjustments applied by the northern neighbor responds to the synchrony of the inflationary cycles of both nations, and not to the economic events they are experiencing.
Retail revenues in Mexico decreased 0.2% in September, in seasonally adjusted figures, marking the second month of decreases and representing the worst performance for a ninth month in five years.
NEWS ABOUT MEXICO IN THE FOREIGN PRESS
Mexico economy grows 0.9% in Q3 but momentum seen easing on tighter conditions
25/11/2022, Reuters, Staff
Mexico core inflation higher than expected in early Nov, rate hikes to continue
24/11/2022, Reuters, Gabriel Araujo
Mexico's central bank not about to 'decouple' from Fed on rates, board member says
23/11/2022, Reuters, Staff
Uber, delivery apps propose offering Mexico drivers social security
23/11/2022, Reuters, Staff
Carlos Slim’s Inbursa No Longer Seeks to Buy Citi’s Banamex
23/11/2022, Bloomberg, Michael O’Boyle
Magnitude 6.2 earthquake strikes off Baja California coast; no tsunami threat
22/11/2022, Los Angeles Times, Quakebot/Gary Robbins
Mexico Signals It May Allow Exceptions to US Corn-Import Ban
22/11/2022, Bloomberg, Eric Martin/ Mike Dorning/ Maya Averbuch
Experts Question Mexico’s Emissions Pledge Amid US Trade Spat
22/11/2022, Bloomberg, Amy Stillman
Mexico headline inflation seen easing in early November, core inflation up
22/11/2022, Reuters, Staff
Mexico detains more than 16,000 foreign migrants in four days
11/21/2022, Reuters, Staff
Pemex sees deepwater Gulf natural gas project boosting output
11/21/2022, Reuters, Staff
Mexican president says considering options for central banker Esquivel's future
11/21/2022, Reuters, Staff
State security chief among 5 dead in Mexico helicopter crash
17/11/2022, The Washington Post, Associated Press
Mexico authorizes U.S. seizure of drug lord Caro Quintero's property
17/11/2022, Reuters, Staff
Mexico investigates death of US tourist seen in fight video
17/11/2022, The Washington Post, Mark Stevenson