The capitalization value of the main indicator of the Mexican Stock Exchange (BMV) accumulates a drop of almost one trillion pesos from its historical maximum on April 1 of this year to date, impacted by the falls in the stock markets at the in the face of greater risk aversion generated by growing fears of a more restrictive global monetary policy, mainly in the United States.
The market value of the 35 issuers that make up the S&P/BMV IPC decreased 11.8 percent in the period, equivalent to 949 thousand 328 million pesos, about 47 thousand 141 million dollars.
Enrique Mendoza, director of fundamental analysis at Actinver, pointed out that the situation of uncertainty in the markets is not just a matter of Mexico, since the central banks have been forced to increase rates and withdraw stimuli, for which investors have been cautious, waiting for economic indicators that give more certainty.
“Central banks are doing everything they need for an orderly exit (of the stimuli), right now what we have seen is that investors try to be conservative in case there are long periods of volatility, the volumes of operation are very low and people, although they see the investment opportunities for valuation reasons, are not participating as actively as they would at another time”, he added.
The main issuers that have suffered the fall since the last historical maximum are those with the highest market capitalization, since Grupo México has lost 203 thousand 266 million pesos; Walmart de México follows with 148 thousand 597 million; América Móvil, with 148 thousand 273 million; Grupo Financiero Banorte, with 50 thousand 633 million pesos and Grupo Financiero Inbursa, with 49 thousand 883 million pesos.
“Now the fears that investors had since the beginning of the year are materializing, which is a restrictive stance by the Federal Reserve, the rise of 50 base points somehow confirms that situation and for the next meetings it is expected that the increases in the reference rate are also of the same magnitude,” said Jacobo Rodríguez, director of economic analysis at BWC.
He added that there are other factors that have affected the pessimism of the markets, such as the war between Russia and Ukraine, an economic slowdown in China, but mainly it is the Fed and everything that has to do with inflation, which have spread more than estimated.
Only two issuers increased their capitalization; Liverpool, with 7 thousand 257 million pesos and José Cuervo, with 3 thousand 663 million pesos.
Waiting for the Fed
Gerardo Copca, director of analysis at MetAnálisis, explained that a high degree of uncertainty has been generated due to the fact that a change in the monetary policy of the United States is coming; “The measure of just raising interest rates are delayed measures, they are measures that generate even more uncertainty, since inflation is at 8.54 percent and it is already considered that it is not transitory,” he said.
He considered that the great fear ahead is that he will have to accelerate the rise in interest rates, even though Powell said that in the next two meetings the adjustments will be half a point.
Mendoza added that volatility can still be seen this month, but the market’s valuation levels allow us to be “cautiously optimistic” for the second half of the year.
Billionaire losses in New York
As for the New York indices, one of the most affected by the uncertainty was the Nasdaq Composite, since from its maximum level of November 19, 2021 to date they have decreased 26.9 percent, which translates into a decrease in its market cap of 8.5 billion dollars.
The Dow Jones has lost a market capitalization of 1.7 trillion dollars since January 4 of this year (last all-time high), while in the Standard & Poor’s 500 (S&P 500) it decreased 7.9 trillion dollars, since January 3 of 2022.
“The (tech) sector remains under pressure amid rising bond yields, concerns about an economic slowdown and Federal Reserve tightening,” Bloomberg analysts said.