Reporting season sheds short-term light on the BMV

Los quarterly reports of the two largest companies in the Mexican stock market were published at the beginning of the results season. The Giants America Movil y Walmex presented numbers higher than expectations limited by the complex economic environment.

Analysts had expected América Móvil’s profits to post a double-digit percentage drop, but they grew 13.7% year-on-year. For Walmart de Mexico (Walmex) anticipated moderate growth due to their efforts to keep prices low, but generated 10% more.

The good results have not been exclusive to the heavyweights of the stock market; They are present in companies from different sectors. The Mexican Grupo Financiero Banorte reported that its profits grew 30%, and Grumfocused on corn products, increased its sales by 21%.

The four reports have been reflected in the stock behavior of these firms. América Móvil went from trading at 16.27 pesos per share to 17.06 (4.86%) during the week, while Walmex it rose from 71.46 to 74.73 pesos (4.58 percent). Banorte advanced 5.90% and Gruma 6.65 percent.

“In the third quarter there was more opening after the pandemic and it is expected that they will continue to present us with positive numbers as a whole, with better operating performance due to the recovery of activities,” said Germán Vega Laing, a professor at the Banking and Commercial School.

The academic, an expert in stock market finance, stated that in terms of profitability: the season is already shaping up much better compared to last quarter. “In part, the improvement can be attributed to greater exchange rate stability in Mexico and in raw materials,” explained Vega Laing.

Market advances, but there are still doubts

The four companies mentioned are a part of the reference index sample S&P/BMV IPC, made up of the 35 most liquid stocks in the domestic market, a sentiment thermometer for local stocks. The index closed the week with an advance of 3.69 percent.

To an acceptable season of quarterly results are added the bets of a slower pace of interest rate hikes in the Federal Reserve, after comments from several officials. This is a factor that, according to Vega Laing, will remain the focus of the market, still without a “turning point”.

“But we still can’t let our guard down. Economic growth rates are worrying and a large part of the impact of inflation has not yet been incorporated into the company numbers. We can think of a positive outlook in the short term and an uncertain one in the medium term,” he said.

jose.rivera@eleconomista.mx