In the first three years and a month of the administration of President Andrés Manuel López Obrador, the Mexican Stock Exchange (BMV) has accumulated a yield of 26.59%, even being the third best start of a six-year term since 2000.
Considering the same presidential period, the administration of former president Vicente Fox has been the one with the best performance of the stock market in the last 22 years, since the S & P / BMV IPC, the main index of the BMV, generated a yield of 49.81 percent.
In the first three-year term of former president Felipe Calderón, the benchmark index rose 27.42%, being the second highest rise for the stock market benchmark. While in the same period of former president Enrique Peña, the CPI barely advanced by 1.54 percent.
Stock market analysts explained that the performance generated by the Mexican Stock Exchange in the last three years must be seen with its nuances, given the periods of high volatility and uncertainty that have caused both national and international events.
“It must be considered that at the beginning of the current administration, in 2018, the stock markets around the world had a strong generalized fall, so the index comes from a low base of comparison, so we are seeing a period of recovery ”explained Jacobo Rodríguez, Director of Financial Analysis at Black Wallstreet Capital (BWC).
Tensions
2018 was considered one of the worst performing years for the stock market, since 2008 (with the fall of Lehman Brothers), affected by geopolitical issues, such as the trade conflict between the United States and China, the political tensions of Brexit, in addition to pressure for central banks to raise low interest rates.
In particular, the BMV suffered strong tensions due to the announcement and, later, cancellation of the works in progress of what would be the New Mexico City International Airport, as well as the initiative to prohibit banks and financial institutions from charging commissions to clients or users for services such as balance inquiry and cash withdrawal.
Other initiatives to change regulations in companies in the energy sector have also caused volatility in the BMV, without leaving behind the pandemic crisis that took the index to its lowest levels, placing it at 35,126.92 points.
Carlos Hernández, senior analyst at Masari Casa de Bolsa, explained that the performance generated in the recent triennium by the S & P / BMV IPC is basically explained by market valuation issues and by the reconfiguration that investors have carried out in their portfolios.
“The growth of the CPI is attributed more to valuation issues, economic prospects and a relocation of investors who are looking for greater value in the medium and long term,” he said.
Data from Banco Base refer that the S & P / BMV IPC is trading at a discount with respect to its historical average, since the EV / EBITDA multiple (company value between operating cash flow) for 2022 is 7.6 times.
Palomean company stocks
Jacobo Rodríguez said that the issuers listed on the BMV have had to apply financial strategies to face an environment of economic stagnation in the last three years.
“Companies are the ones that have done their job very well because they have adapted to the low growth environment, they have had to resort to cost reduction, refinancing of liabilities, among other initiatives to maintain good financial management,” emphasized the director of Financial Analysis at BWC.
Throughout these 37 months, there are companies that have stood out for generating the highest return in the stock market. The podium goes to the airline Volaris, whose shares in that period have risen 190.66 percent.
This space is also shared by the insurance company Quálitas Controladora with 136.76% increase and the mining giant Grupo México with 112.65%.
The main world producer of tequila José Cuervo is also added with an advance of 107.10% and Grupo Aeroportuario del Pacífico (GAP) with a 94.06% increase in the price of its papers.
The S & P / BMV IPC reached an all-time high on August 18 of last year, reaching an unseen level of 51,986.08 units that day. The previous maximum level was on July 25, 2017 when the main stock index was located at 51,713.38 units.
“The record achieved in August of last year reflects that the Mexican Stock Exchange is just in the process of recovering from its previous highs, while other markets such as the United States have an upward trend,” said Jacobo Rodríguez.
Reference-www.eleconomista.com.mx