The Mexican Stock Exchange (BMV) closed operations in the first month of 2022 with its worst monthly performance since March 2020, when it was impacted by the start of the health contingency due to the coronavirus pandemic.
In this way, the S&P/BMV IPC, the main index of the BMV, ended the first month of the new year with an accumulated loss of 3.64%, to settle at 51,330.85 points, in line with global stock markets.
The above after it registered two all-time highs in early January, which led it to climb almost to 54,000 integers.
Meanwhile, the FTSE-Biva, the stock index of the Institutional Stock Exchange (Biva) fell 3.73% in January, ending at 1,060.22 units.
Mexican indices trimmed losses this Monday (the last day of January), as they closed trading up 1.32% for the S&P/BMV IPC and 1.43 for the FTSE-Biva.
The three winning issuers in January are Grupo Financiero Inbursa (+21.33%), followed by Banco del Bajío (+20.68%) and Alsea (+11.49%).
For their part, the three companies that ended with the greatest losses in their trading in January were Grupo Carso (-12.84%), Grupo Elektra (-12.59%), as well as América Móvil (-10.51%).
The pressures that plunged Mexican stocks down at the beginning of the year stem from concerns related to monetary policy and the conflicts between Russia and Ukraine. In addition, uncertainty remains about the effect that the pandemic will continue to have on the country’s economic activities.
“You can talk about three factors that have caused this downward trend for the capital market. One has been speculation about the future of monetary policy, especially of the United States Federal Reserve (Fed)”, explained Karla Low, analyst at Banco Base.
In a virtual conference, the specialist recalled that an increase in interest rates makes investments in risky assets on the capital market, such as shares, less attractive. It is also an item that is considered when making the valuation of companies.
Another factor “was the increase in nervousness due to heightened geopolitical tensions between Russia and Ukraine, which accentuated volatility and losses due to risk aversion.” Finally, the third element is the quarterly reporting season of companies, for which reports with lower profits are anticipated.
“Going forward we expect markets to remain capped, especially on expectations of less accommodative monetary policy. The new variants of the coronavirus will also continue to be an important factor, although they have been less lethal, but consumers continue to restrict themselves,” added Low.
For its part, an analysis by Intercam Casa de Bolsa indicated that “inflation and the trajectory of interest rates that the Federal Reserve will dictate will be the core issue and the main focus of attention of investors. There will be a rotation of assets in the that investors will favor value companies against growth companies that traditionally pay higher multiples.