Introduction
Mexico’s two stock exchanges, the Bolsa Mexicana de Valores (BMV) and the Bolsa Institucional de Valores (Biva), have experienced a decline of more than 3% since reaching their historical highs in early July. This drop is primarily attributed to concerns over potential U.S. tariffs, economic stagnation, and expectations of further interest rate cuts by the Bank of Mexico (Banxico).
Experts’ Perspectives
Gabriela Siller, the Director of Analysis at Banco Base, identified three key factors influencing the stock indices:
- Trade Tensions: Nervousness surrounding U.S. tariffs on Mexican exports continues to impact the market.
- Interest Rate Expectations: Anticipation of Banxico’s continued, albeit slower, interest rate reductions.
- Economic Stagnation: Concerns about Mexico’s slow economic growth, potentially leading to a recession, which in turn affects the capital market.
Felipe Mendoza, an analyst at ATFX LATAM, echoed these sentiments and added that the tightening of trade policies and profit-taking by investors have further weighed on stock performance.
He highlighted the geopolitical and trade challenges posed by the Trump administration’s aggressive stance, including recent U.S. tariffs on Mexican goods and threats to other crucial products like tomatoes. Domestically, Mendoza noted that despite positive economic signals such as industrial production growth, investors remain concerned about unresolved political and trade risks, including security issues related to drug cartels.
Stock Performance
The uncertainty around tariffs has led to increased volatility in the stocks listed on Mexican exchanges. Some of the companies that have negatively impacted the national market in July include:
- Banregio: Down 10.51% to 143.78 pesos.
- Alsea: Down 8.52%.
- Walmart de Mexico and Centroamérica (Walmex): Down 8.30%.
- Grupo Televisa: Down 7.96%.
- José Cuervo: Down 7.59%.
On the positive side, stocks that have shown gains are:
- Megacable: Up 7.61% to 56.88 pesos.
- Promotora y Operadora de Infraestructura (Pinfra): Up 6.08%.
- Kimberly-Clark: Up 4.12% to 35.88 pesos.
- Grupo Aeroportuario del Centro Norte (OMA): Up 3.62% to 264.44 pesos.
- Cemex: Up 2.15% to 13.79 pesos.
Key Questions and Answers
- What is causing the decline in Mexican stocks? The primary reasons are concerns over potential U.S. tariffs, economic stagnation in Mexico, and expectations of further interest rate cuts by Banxico.
- Which companies have been most affected by the market downturn? Banregio, Alsea, Walmart de Mexico and Centroamérica (Walmex), Grupo Televisa, and José Cuervo have experienced significant declines.
- Are there any companies that have shown gains during this period? Megacable, Promotora y Operadora de Infraestructura (Pinfra), Kimberly-Clark, Grupo Aeroportuario del Centro Norte (OMA), and Cemex have all shown positive performance.
