Urbi Desarrollos Urbanos (URBI*), Mexico’s third-biggest publicly-traded homebuilder by sales, gained for the first time in nine sessions, snapping a losing streak during which the shares fell 41 percent.
Urbi surged 6.4 percent to 3 pesos at the close of trading in Mexico City, rising from a record low of 2.82 reached yesterday. As recently as last year, the stock had traded as high as 20.89 pesos. Mexico’s benchmark IPC index rose 1 percent today
Shares of the country’s homebuilders have plunged this year amid disappointing earnings results, negative cash flow figures and changes in government housing policy to promote more capital-intensive apartment construction.
“Investors are thinking that the sell-off has been exaggerated,” said Carlos Hermosillo, an analyst with Grupo Financiero Banorte SAB in a telephone interview. “I would be wary of being positive just yet.”
Corp. Geo SAB (GEOB), the country’s second-biggest homebuilder, rose 0.7 percent to 6.88 pesos, also the first gain since March 6. Desarrolladora Homex SAB (HOMEX*), the biggest homebuilder, fell 5.9 percent to 19.67 pesos, extending its plunge to nine days.
Goldman Sachs Group Inc. this week cut its rating on Culiacan-based Homex to sell from the equivalent of hold and lowered its price targets for Mexicali-based Urbi and Mexico City-based Geo. Credit Suisse Group AG maintained its recommendation of the three companies at the equivalent of sell.
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