Weekly Mexico Market Monitor
Friday AM, September 8, 2023
The FTSE-BIVA index closed on September 7 at 1,078.59 down slightly from its August 31 close at 1,089.41.
The MXN/USD exchange rate closed at 17.60 pesos to the dollar on September 7 significantly weaker than its close of 17.04 pesos on August 31.
The Mexican 10-year bond (2031) closed on Thursday with a yield of 9.492%, slightly up from a yield of 9.278% on August 31.
The FTSE-BIVA Top Stock Gainers for the week were: CHDRAUIB (+14.14%), HERDEZ (+3.99%) and LABB (+3.25%) and the Biggest Losers were: OHLA (-9.83%), TELEVISA (-8.99%) and LIVERPOOL (-6.71%).
CORPORATE & MARKET NEWS
Cemex announced that it was exploring the possible sale of its business in the Dominican Republic, which could generate revenues in excess of US $1 billion for the cement company. For the time being, its share price reacted positively to the rumors, and on Friday its market cap amounted to US $11.7 billion.
QUALITAS in its Analyst Day forecasted long-term 10% top-line growth and a 20% return on equity. Half this growth is anticipated from its core Mexican auto insurance, which is 90% of its revenue. The rest stems from diversification in areas like health insurance, expansion through Flekk, and serving trucks at the national border. The company plans to finance new ventures with excess capital (US$600 million).
Chinese cars in Mexico have grown their market share from 5.7% to a stunning 19.4%, according to the Mexican Automobile Distributors Association (AMDA). Guillermo Rosales, AMDA's President, noted that Chinese brands have expanded the variety in the market. Yet, he emphasized that this growth isn't solely due to new Chinese supply. Other major brands in Mexico are also catching up post-Covid-19, leading to an overall surge in the car market.
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