Industrias CH Gains on IPC Index Speculation: Mexico City Mover

Industrias CH SAB (ICHB), Mexico’s largest steelmaker, rose to a one-month high after Deutsche Bank AG said the stock will probably join the nation’s benchmark stock index.

The shares added 0.9 percent to 60.58 pesos today, the highest since May 15 on a closing basis. Earlier, the shares jumped as much as 3.6 percent in intraday trading.

The company will probably be added to the index after Grupo Elektra SA’s possible deletion from the IPC in a September rebalancing, Deutsche Bank said today in an e-mailed report. Elektra will exit the index unless it unwinds an equity swap soaking up its free-floating stock, according to the report.

“Elektra’s deletion will give space for one more stock,” Frederick Searby, a Deutsche Bank analyst, wrote in the report. Industrias CH “is currently the best positioned to take advantage of this.”

Elektra has plummeted 65 percent since April 11, when the Mexican stock exchange changed its requirements for eligibility on the benchmark index, saying shares tied up in derivative instruments couldn’t be counted toward the free-float prerequisite. It fell 1.5 percent today.

Javier Vigil, an investor relations official at Industrias CH, said the company has been trying to increase liquidity to get the stock back on the IPC after almost a year. Last October, it hired Credit Suisse Group AG as a market maker, and company officials have been visiting investors to boost interest, he said in a telephone interview from Mexico City.

“It’s a priority to get back on the index,” Vigil said by phone. “We’re very optimistic.”

Roberto Gavaldon, a spokesman for the exchange operator, Bolsa Mexicana de Valores SAB, and Dan McCosh, an Elektra spokesman, didn’t immediately return requests for comment.

To contact the reporter on this story: Jonathan J. Levin in Mexico City at jlevin20@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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