Walmex Gains With Bimbo as Food Tax Avoided: Mexico City Mover

Wal-Mart de Mexico SAB posted its biggest advance in two years after President Enrique Pena Nieto avoided proposing taxes on food and medicine in a fiscal bill he sent to Congress yesterday.

Walmex, as Latin America’s biggest retailer is also known, climbed 5.5 percent to 34.09 pesos at the close of trading in Mexico City, the most since August 2011. Supermarket chain Grupo Comercial Chedraui SAB jumped 7.1 percent, while baker Grupo Bimbo SAB rallied 7.7 percent. The country’s benchmark IPC index advanced 2.6 percent, the most in 21 months.

Pena Nieto defied some predictions that he would seek to tax food and medicine as part of efforts to bolster revenue collection. The government is looking for ways to broaden its tax base as part of an effort to reduce the burden for state-owned oil producer Petroleos Mexicanos.

The bill “could give a certain sense of relief for issuers in the commercial and food sectors,” Carlos Hermosillo, a stock analyst with Grupo Financiero Banorte SAB, said in a research note today.

Soda-pop bottlers lagged the IPC after the bill called for a tax of one peso per liter on sugary drinks.

Coca-Cola Femsa SAB, Latin America’s largest Coke bottler, rose 0.1 percent, the third-worst performance among the IPC’s 35 members. Arca Continental SAB, Latin America’s second-biggest Coke bottler, rose 1 percent today.