Homex Jumps After Government Pledges Support: Mexico City Mover
Desarrolladora Homex SAB (HOMEX*), Mexico’s biggest homebuilder by 2012 revenue, rebounded from a record low after a government minister pledged support for the country’s developers.
The shares surged 29 percent to 3.68 pesos at 1:10 p.m. in Mexico City. The Culiacan, Mexico-based company plunged 57 percent in the prior three days, the most among 2,588 securities on the Bloomberg World Index with average daily trading volume of at least 1 million shares.
Mexico’s largest homebuilders, which also include Corp. Geo SAB and Urbi Desarrollos Urbanos SAB, have hired advisers to help restructure debt accumulated while buying up properties that have since lost value because of shifts in government housing policies. The homebuilders “have all the support” of the government, Carlos Ramirez Marin, the minister for urban and agrarian territorial development, told reporters in Mexico City. They are “very important for the country,” he said.
Today’s rally is driven by “the pure speculation that the government is going to intervene to not leave the homebuilding sector bankrupt,” Aldo Miranda, a trader at Intercam Casa de Bolsa SA in Mexico City, said in an e-mailed response to questions. “I think it’s very risky for your investment to depend on whether the government intervenes or not.”
The shares of Corp. Geo SAB and Urbi Desarrollos Urbanos SAB were suspended from trading after they failed to meet the Mexican stock exchange’s deadline last week for reporting second-quarter results.
To contact the editor responsible for this story: Brendan Walsh at email@example.com