Mexican election results well received

Jubilation on Mexican Stock Exchange (BVM); reaches level not seen since August 2017.
The FTSE-BIVA Index also advanced 2% to 1,053.99 points. The gaining sectors were financials and the consumer industry sector.

Mexico’s stock markets experienced a positive day, reacting favorably to the preliminary results of the quick count of the mid-term elections held this June 6 in the country.

The performance of the S&P/BMV IPC index, of the Mexican Stock Exchange, stood out, ending with a rise of 1.87%, rising to 51,427.64 units, a level not seen since August 24, 2017.

In the stock market, the volume traded was 256.2 million securities, with an amount of 23,213 million pesos.

Even on Monday, the BMV’s main index touched 51,705.23 points, a level that placed it just 0.13% away from reaching its all-time high of July 2017 when it touched 51,772.37 integers.

The FTSE-BIVA index, of the Institutional Stock Exchange, also concluded in positive territory, up 2% to 1,053.99 units.

By sectors, yesterday’s winners were the financial sector, with a rise of 3.96%; the consumer industry sector, with an advance of 2.1%; followed by the industrial sector, with a rise of 1.03%.

On the issuers’ side, the best performers on Monday, which belong to the S&P/BMV IPC, were the media company Grupo Televisa with an increase of 7.15% or 10,853.16 million pesos in market gain; followed by the restaurant operator Alsea with an increase of 7.03%, equivalent to an increase of 1,945.50 million pesos in its market cap.

The Bajío and Banorte banks gained 6.78 and 5.43%, respectively. The fifth best performing stock was the producer of cleaning and personal hygiene products, Kimberly-Clark de México, ending with an increase of 4.5%, which represents an increase of 2,578.80 million pesos in its market capitalization.

Luis Alvarado, Equity analyst at Banco Base, explained that the appreciation in Mexico’s stock markets was “due to the reaction to the anticipated results of the elections held on Sunday in Mexico”, since it operated in a session in which there was no volatility.

Preliminary results of the quick count show that the National Regeneration Movement (Morena), the party in power, lost the qualified majority in the Chamber of Deputies, “which was well received by the market”.

If the ruling party does not have a majority in the Lower House, it may face “obstacles” in any attempt to reform the Constitution or to carry out any other initiative that causes uncertainty or drives away investment.

Jacobo Rodríguez, director of Financial Analysis at Black Wallstreet Capital, estimated that the S&P/BMV IPC could reach 54,800 units this year.