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Cemex aims for $950m Latin American float in Colombia

Cemex, the Mexican cement producer, hopes to raise up to $950m from the partial sale of its Latin American subsidiary, people familiar with the deal told the Financial Times on Monday.

The company has set a price range of 11,000-13,500 Colombian pesos a share for the sale of about 24 per cent, or 126.6m shares, in Cemex Latam Holdings, Cemex’s Central and South American unit, in a forthcoming initial public offering on the Colombian stock exchange.

 
FT related CEMEX news:
The IPO of Cemex Latam, which includes Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Nicaragua and Panama, is part of the company’s ongoing efforts to pay down its high debt. As of end of September, gross debt, which includes perpetual notes, stood at $17.7bn.

The planned IPO follows a recent refinancing agreement for about $7bn in loans, which extends maturities by three years from 2014 to 2017. At the time, analysts welcomed the agreement, saying that it bought the company valuable time to allow global cement markets to recover.

“The refinancing lays to rest any residual concerns about the company’s solvency,” one analyst who asked not to be named, told the FT recently.

That, coupled with positive results during the third quarter – Cemex said that earnings before interest, taxes, depreciation and amortisation (ebitda) between July and the end of September grew 9 per cent compared with last year to reach $730m, the highest ebitda generation in three years – has fuelled a rally in the company’s share price this year.

For years, Cemex was considered one of the most successful “multilatinas” as Latin American multinationals are known, as it embarked on a 20-year acquisition spree that turned it into the world’s third-largest cement producer by volume.

But the Monterrey-based company came unstuck following its purchase of Rinker, the Australian building-materials supplier, for $15.3bn – an acquisition it financed with short-term loans and that came on the cusp of the US housing crash.

Source: Financial Times, 22.10.2012

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Filed under: Colombia, Exchanges, Mexico, News, , , , , , , ,

Mexico: Economic recovery slowly materializing – April 2010- IXE-BANIF Monthly Analysis

We are increasingly positive on the Mexican market, although we await further hard data to confirm our expectations. We see many indications of a recovery, which are already reflecting on the local stock market. However, we believe that the continuation of a positive news flow might support further appreciation.

We continue to base our portfolio strategy on specific catalysts for the companies we find attractive. First quarter results have already started to influence some of our choices. For April, we maintained the core of our March portfolio, with weight unchanged for America Movil, Cemex, Genomma LAB, Grupo Mexico, Mexichem and Walmex, which together account for 70% of our portfolio’s total weight. For the remaining 30%, the changes were the inclusion of Femsa, Penoles ICA and Tlevisa, a reduction in weight of ARA and the withdrawal of Autlan, Axtel and GEO.

Our estimated GDP may need another upward revision

Recent statements from the Finance Minister suggest that the Mexican economy might grow 5% in 2010, while the official government estimate remains at 4.2%. If hard data confirm this trend, we might find our own 4.1% growth estimate demanding a further upward revision, although we increased our figure just last month. Recently released statistics, such as the creation of new jobs, the reduction in the rate of unemployment to 5.3% from 5.9%, and industrial production growth, support this economic strength. Expectations are for local consumption to recover, and demand in the US for Mexican products has already begun increasing.

Additionally, data released for February show that vehicle sales grew nearly 100% YoY.

Expectations for interest rate and inflation remain unchanged

Expectations for interest rates, currently at 4.5% pa, continue unchanged, as we continue to foresee increases of 0.25% applied only in September and in October. This is in line with expectations for 2010’s inflation, which we continue to estimate at 4.94%. S

See detailed Detailed Market Analysis Report – April 2010

Source: IXE Banif, 01.04.2010

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, News, Risk Management, , , , , , , , , , , , , , , , ,

Mexico: The bad news is finally out – December 2009 IXE Banif Market Analysis

Fitch has finally downgraded Mexican debt. However, as always, there is good news with the bad, for they say that the outlook is now stable. In addition, Congress has finally approved the tax increase, which should result in an improvement in government revenues, although the decision was not sufficient to avoid the downgrade. S&P has still to give its verdict on the country’s outlook. Expectations are that they will avoid downgrade and, as Fitch did, maintain a stable outlook, but with a higher notch.”

Mexico – Monthly Allocation – December 2009

The economic outlook seems to be improving. Although still negative, indicators are above expectations. GDP dropped 6.2% in 3Q09, which compares to the market’s estimated drop of 6.8%. For 2010, investors expect a turn around, estimating a 3.1% growth. Much still remains based on an improvement in the USA. Approximately 27% of the country’s economy depends on its neighbor.

Inflation watched closely

Inflation has not been a concern up to now, continuing below the 4% level. However, expectations are that the beginning of the year will show it moving above this level, increasing concerns that the Central Bank will start moving basic rates up. Expectations are that the beginning of an upward trend in rates will only start in September 2010. Investors will be on the lookout for the Mexican’s Central Bank estimate, scheduled for release during the first week of December.

Other data investors are going to be paying a lot of attention to during the next couple of weeks are on the US, especially Black Friday sales that will give an indication of how good (or bad) Christmas sales will probably be. An improvement should indicate an increase in remittances to Mexico, improving the Mexican economy.

No real concern with the change to Central Bank

The change in the President of the Central Bank is no real concern. Although doing a good job, the leaving President was eternally in dispute with President Calderon. Replacing him is Mr. Carstens, who is the Secretary of Finance, and who has good international exposure. The question that arises is who is going to replace him as Finance Secretary.

December is the month with the highest sales, due to Christmas. Thus, we are basing our portfolio on the stocks of companies that will benefit from this. We are not recommending any shorts this month.

Outperforming the IPyC – Recommended BUY Portfolio (“LONG”)

Stock – Catalysts/Fundamentals

AMXL – excellent results from the launching of promotions for post paid subscribers

AXTEL – possible change in foreign shareholder legislation

CEMEX – should successfully place convertible bonds

FEMSAUBD – reducing due to uncertainties coming from rumors

GAP – December traffic should be positive

GEOB – trading at attractive valuations

GMEXICOB – defensive play on copper price increases

ICA – expectations that it will win the tenders for more public projects

Peñoles – precious metal price seasonal increase

Simec – better outlook on USA auto sales in 2010

Televisa – looking for a JV to participate in wireless spectrum auctions

URBI – should do well on Moody’s and S&P’s upgrade and on attractive valulations

WALMEXV – strongest month for retailers with 4Q representing 30% of sales.

Source: IXE Banif, 01.12.2009

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, News, , , , , , , , , , , , ,

Mexican IPC Index ETF “iSHARES NAFTRAC” listed on Spain’s LATIBEX

BGI IShares listed it’s Mexican ETF (TRAC) NAFTRAC on the Spanish LATIBEX exchange on November 19th, 2009.

This is the first time a Mexican traded TRAC is listed abroad. It marks a significant recognition of the Mexican financial markets and in particular for BMV – Bolsa Mexicana de Valores (BMV) the Mexican Stock Exchange in it’s international expansion.

The NAFTRAC tracks the top 35 traded Mexican stocks according to the BMV IPC index. The TRAC was listed on April 16th, 2002 and was the first such instrument to be listed in Mexico and Latin America, and has become one of the most traded instruments in Mexico’s Stock Exchange.

Barclays Global Investors (BGI) Mexico, is underwriting and listing the TRAC on LATIBEX in Madrid, Spain.

Note: TRAC (Títulos Referenciados a Acciones) are the Mexican equivalent for ETF’s traded on the stock exchange and issued by BGI IShare Mexico

Note: BMV IPC tracks companies of global influence like WalMex, FEMSA (CocaCola), Telmex, Modelo, CEMEX, Bimbo, AMX, Bolsa and others with global operations and revenues. See latest performance of IPC here.

Source: BMV, 19.11.2009
Summarized translation by FiNETIK from BMV press release 19.11.2009

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, News, Services, , , , , , , , , , , , , , , ,

Mexico: Market is Bottoming Out – June2009 IXE – Banif Analysis

Mexico has probably seen the worst of economic data, but all efforts to revert the negative situation will only show up in the second half. The Government was actually quick in implementing measures to contain the downturn but, despite the continuous drain to the country’s fiscal situation, fruits from these efforts will only come about in 2H09.
Rating agencies are keeping a close watch on indicators and the imminent reduction of the country’s rating. This would be badly regarded by the financial community for, although it does not signify losing the valuable Investment Grade label, a downgrade is always a blow.
There is always good to the bad.
Economic activity dropped by 8.2% in 1Q09 with industrials the worst hit, contracting 9.9%. This is the worst performance since 1995. Exports are down but worse than that, imports have also dropped. On the other hand, the dollar continues to weaken around the globe and against the Mexican Peso, stabilizing at around P$ 13/US$. This should allow the Bank of Mexico to reduce interest rates by 50 bps in June and another 25 bps in July, to end the year at 4.5%.
Summer is here, with or without tourists
Mexico has always been a tourist pole, attracting not only the neighboring Americans but also people from the rest of the world looking for warm seas and white beaches. The country invested heavily in hotels and in infrastructure, successfully attracting tourists. However, there is one thing that all are afraid of, and that is illness whilst on holidays. The influenza (swine flu as generally known) hit Mexico the worst, creating a barrier between the white beaches and the tourist. The Government has taken steps, but there are no expectations of a full house this year.

On this note, we are putting into our portfolio this month some of the stock most affected by the influenza, such as airports. On the other hand, we are decreasing the weight of metals in our portfolio, as they have performed well and now look expensive.  Download: Mexico – Monthly allocation – June 2009 IXE Banif
Outperforming the IPyC – Recommended BUY Portfolio (“LONG”)
Stock – Catalysts/Fundamentals
AMXL – underweight on interconnection losses
Autlan – Higher manganese prices and discounted to peers
Bimbo – positive results even in the USA
Cemex – decreasing stake, as still waiting for its debt restructuring
GAP – government actions for summer should help airports
GEO – with an EV/EBITDA of 5.7x, it has the best valuation in the sector
GMexico – still waiting for the chapter 11 announcement in July
ICA – strong candidate for the Panama Canal expansion
Mexichem – positive results from efficiency and the strengthening of the Peso
Televisa – increase in the amount of viewers still due to the flu
Urbi – although not the cheapest, has traded at attractive valuations
Walmex – performing better than peers.

Source: IXE & Banif, 01.06.2009

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, News, , , , , , , , , , , , , ,