May 30 (Bloomberg) -- Mexico’s homebuilders rallied, led by Desarrolladora Homex SAB, after the government delayed the presentation of new housing industry rules to hold more discussions with industry representatives.
The Mexico Habita Index of six homebuilders rose 4.7 percent at 3 p.m. in Mexico City. Homex surged as much as 12 percent to 9.91 pesos, the most since April 19. The benchmark IPC index of 35 Mexican companies rose 1 percent.
Alejandro Nieto Enriquez, deputy minister of urban development and housing, told reporters today he delayed the presentation of the new rules for several weeks after industry groups asked for time to make suggestions. The government had planned to give details on the allocation of housing subsidies by the end of this month.
“The market is looking favorably upon signs of a relationship based on dialogue instead of confrontation” between the government and the homebuilding industry, Carlos Hermosillo, an analyst at Grupo Financiero Banorte SAB, said in a telephone interview from Mexico City.
The Habita Index has plummeted 55 percent this year, led by a 74 percent drop in shares of Urbi Desarrollos Urbanos SAB. Many companies in the industry have seen their cash balances dwindle as they struggle to adapt to a shifting housing subsidy policy that now favors capital-intensive apartments in cities instead of single-family homes in commuter towns.
After a decade of over-construction in some regions, some neighborhoods have been abandoned, and builders are saddled with idle inventory and increased debt loads.
Geo, the second-biggest builder by sales, rose 3.3 percent today to 5.33 pesos. Urbi, the third-biggest, gained 6.2 percent to 2.06 pesos.
“Representatives from the housing industry have been partners in this process,” Nieto Enriquez told reporters in Mexico City. “They have specifically asked for the postponement of the announcement of the new rules, with the goal of proposing more alternatives that will, from their point of view, contribute to enrich the body and the significance of the rules.”
To contact the reporter on this story: Jonathan Levin in Mexico City at firstname.lastname@example.org
To contact the editor responsible for this story: David Papadopoulos at email@example.com