The Mexican Stock Exchange reported its worst month since August 1998, the year in which it accumulated a monthly loss of 29.52 percent, affected by expectations that the upward cycle of interest rates by the Central Banks will continue.
The index of the country’s main stock exchange, the S&P/BMV IPC ended this month with a contraction of 6.70 percent, going from 48,144.33 to 44,919.22 points, a decrease of 3,225.1 units.
Carlos Hermosillo, an independent analyst, explained that “the most important thing that has affected the short term is the expectation that monetary policy around the world will follow a restrictive path, eventually seeking to curb inflationary pressure; In this, we must consider that there are two specific fronts that are already changing: the levels of rates, and the reduction of the balance sheets of the central banks (the so-called QE). The problem is that this occurs at the same time that the indicators of economic dynamism point to a serious weakening, which could deepen with the monetary strategy”.
Among the companies listed on the Stock Exchange, the three that show the greatest decreases in their yields are the media station Televisa, with 21 percent less, the mining company Industrias Peñoles, with 19.26 percent, and those of the telecommunications service provider, Telesites, which fell 15.93 percent.
In contrast, the shares with the highest gains are those of the concession operations company, Pinfra, with 6.98 percent, the OMA airport group increases of 6.10 percent, and Industrias Bachoco, a poultry producer, rises 4.45 percent.
“It seems to me that the rest of the year the capital market in Mexico will possibly have some recovery, although nothing spectacular and mainly generated by the excessive price reduction. This will depend on the moment when it is confirmed that inflation has peaked and with this, we can have a clearer picture of how far interest rates will go in the United States and therefore in Mexico,” added the specialist.
