Genomma Posts Weekly Decline on Tax Concern: Mexico City Mover

Aug. 30 (Bloomberg) -- Genomma Lab Internacional SAB, a Mexican producer of over-the-counter drugs, had its biggest weekly drop since June on speculation the government may create new taxes for medicine under a fiscal overhaul.

Genomma Lab sank 0.6 percent to 28.64 pesos at the close of trading in Mexico City today, bringing the selloff to 4.5 percent this week, the most since the period ended June 21. The benchmark IPC index of 35 Mexican stocks rose 0.8 percent today, trimming its slump this week to 3.5 percent.

President Enrique Pena Nieto’s Institutional Revolutionary Party lifted its ban on members’ voting for taxes on food and medicine in March. While the government hasn’t yet announced details of the tax overhaul that Pena Nieto has pledged to pass this year, Finance Minister Luis Videgaray told reporters on Aug. 28 that the plan will be presented with the administration’s budget proposal by Sept. 8 at the latest.

“The market is finally pricing in the risks from the fiscal reform,” Aldo Miranda, a trader at Intercam Casa de Bolsa SA in Mexico City, said in a telephone interview.

Genomma Lab will be among the Mexican stocks most affected by the reform, he said.

To contact the reporters on this story: Julia Leite in New York at jleite3@bloomberg.net; Jonathan Levin in Mexico City at jlevin20@bloomberg.net

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