The strength of the Mexican peso affects the Mexican Stock Exchange (BMV) to such an extent that it has been one of the most backward in the world in terms of profitability so far this year, because many of the companies listed have global revenues, and it does not host other economic sectors that benefit, such as technology, said David Camposeco, head of asset allocation at Principal Mexico.
In an interview, the specialist explained that with the Mexican currency so strong, global income is lower in pesos, which reduces the profits of important exporting companies.
While the tech-heavy Nasdaq has returned more than 20 percent this year and the tech-heavy S&P 500 has gained more than 15 percent, the BMV’s Index of Prices and Quotations (IPC) is down around 8 percent. Another example is Japan’s Nikkei, which is up more than 20 percent in the reporting period, or Germany’s DAx, which is up close to 10 percent.
Investors are willing to accept risks, but they do so, for example, in companies that are more detached from the economic cycle. If the United States, Mexico’s main trading partner, experiences a slowdown, in the end the bet on technology issuers is for a longer period than the economic cycle; they are a little more resilient. On the other hand, if they are invested in companies that depend on the consumer being strong, it is a bet that the growth cycle will continue. Given this uncertainty, you go with companies that do not depend so much on the cycle.
Camposeco described.
He recalled that Morena’s landslide victory in Congress caused an overreaction that has been diluted because there is a rate differential of more than 5 percent compared to the United States, but when constitutional reforms are discussed the same thing could happen again. surprise
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