Macrofinanzas - Pitch sobre la Bolsa Mexicana de Valores

Executive Pitch on Investments in the Mexican Stock Exchange

Introduction to the Speaker and Agenda

• Juan Palacios introduces himself as an industrial engineer with over 8 years of experience in finance, currently a project manager at Whirlpool, focusing on digital transformation projects.

• The agenda includes a macroeconomic overview, insights into the Mexican Stock Exchange (BMV), investment recommendations, and conclusions.

Macroeconomic Overview

• Inflation is highlighted as a significant variable affecting global economic behavior, driven by post-pandemic consumption patterns, geopolitical conflicts, supply chain issues, and COVID-19 resurgences.

• In Latin America, inflation has diminished real interest rates; countries like Colombia and Guatemala show interest rates lower than inflation, making their debt markets less attractive.

• Consumer behavior indicators in the U.S., such as retail sales contraction and new home sales hitting lows not seen since 2016, suggest a potential recession.

• Emerging economies are expected to attract capital due to higher anticipated returns compared to developed markets like the U.S., despite current challenges.

• Recovery for Latin American economies is projected between 2022 and 2024 post-pandemic recession impacts; Mexico's recovery is expected by late 2023.

Analysis of the Mexican Stock Exchange

• Focus shifts to the IPC (Índice de Precios y Cotizaciones), which tracks the top 35 companies listed on BMV since its inception in October 1978.

• Seven major companies account for 62% of total market capitalization within the IPC: América Móvil, Walmart, Banorte, Grupo México, FEMSA, Cemex, and Bimbo. The remaining weight is distributed among other firms.

Historical Performance of IPC

• The IPC experienced a significant drop of 24% during early pandemic months but has since rebounded by 44.6%. It also faced a decline during the financial crisis of 2008–2009 but recovered strongly afterward with an increase of over 127%.

• Despite crises throughout its history (notably marked in red circles), the IPC has maintained an impressive compound annual growth rate of 29.5% since its creation.

Advantages of Investing in Stocks

• Key advantages include regulated financial statements ensuring transparency—unlike private companies—and shareholder protection even for minority investors. Liquidity allows easy buying/selling of assets on BMV.

• Technological advancements have enabled trading through mobile devices enhancing accessibility for investors compared to traditional methods.

Comparative Growth: IPC vs S&P500

• Since 2000, IPC outperformed S&P500 significantly with an increase of approximately 807% versus S&P500’s growth at around 216%, indicating better potential returns from Mexican investments despite risk factors influencing expectations for future performance in sectors like commodities and health care due to inflationary pressures and geopolitical tensions such as war in Ukraine.

Investment Performance Analysis

Overview of Company Performances

• The analysis highlights companies such as Cemex, Televisa, Grupo México, Bimbo, Gruma, and Grupo Carso that have shown attractive growth. Notable banks mentioned include Inbursa, Banbajío, and Banorte.

• A graphical representation indicates that companies at the loss end experienced a significant rise in September 2021 but are currently facing negative growth.

Positive Growth Companies

• In contrast to the underperformers, certain companies have demonstrated consistent upward trends since 2021 and have reinforced this positive trajectory into 2022.

Investment Recommendations

• The final investment recommendation suggests a diversified portfolio allocation:

• 40% in low-risk stocks

• 20% in high-volatility stocks

• 20% in CETES (government bonds)

• 20% in FIBRAS (real estate investment trusts)

Closing Thoughts

• The presentation concludes with a quote from Warren Buffett emphasizing the importance of starting investments early. Buffett's own early start is highlighted as a key factor for success.