Walmex Surges Most in Six Years After January Increase in SalesBen Bain
Wal-Mart de Mexico SAB, the nation’s biggest retailer, rallied the most in six years after reporting a larger-than-forecast jump in sales last month.
Shares of the company known as Walmex increased 8.8 percent to 32.18 pesos today in Mexico City, the biggest gain since October 2008. The benchmark IPC equity index climbed 0.6 percent.
Walmex said Thursday after the close of markets that sales at stores open more than 12 months rose 5.6 percent in January from the same period in 2014, the fastest pace in two years. Enhancing the Mexico City-based retailer’s prospects was a government report Friday indicating that the nation’s consumer confidence increased 7.8 percent last month from a year earlier.
“Such positive data could be a turning point,” Jorge Lagunas, a money manager who helps oversee $200 million in equities including Walmex at Grupo Financiero Interacciones, said in a telephone interview from Mexico City, referring to the increase in sales. “It seems that there’s an excess of flows buying because many portfolio managers now want to be equalweight” after reducing holdings earlier amid concern over previous sales data.
Credit Suisse Group AG, which has a rating equivalent to hold and a target price of 32 pesos on Walmex’s stock, said the increase in same-store sales was “considerably above” the bank’s forecast of 2.5 percent.
Analysts surveyed by Bloomberg project Latin America’s second-biggest economy will grow 3.4 percent in 2015, its quickest pace since 2012 and faster than Brazil and Chile.