Urbi Advances in Mexico to Snap Eight-Day Losing StreakDanielle Verbrigghe
Urbi Desarrollos Urbanos, 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, the country’s second-biggest homebuilder, rose 0.7 percent to 6.88 pesos, also the first gain since March 6. Desarrolladora Homex SAB, 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.