ICA Jumps Most in Three Months on Sign of Mexico Government Helpby and
Official says ICA will probably get payment this month
Shares jump as much as 17%, most intraday since September
Empresas ICA SAB surged on speculation that Mexico’s government will speed up payments to the construction company after it missed a bond payment last month.
Shares jumped as much as 17 percent Tuesday, the biggest intraday advance since Sept. 9. ICA rose 14 percent to 4.62 pesos at 1:24 p.m. in Mexico City.
The rally comes after Raul Murrieta, Mexico’s deputy minister of infrastructure, said that ICA will probably receive a payment from the Mexican government this month as authorities seek to accelerate transfers to the builder. The shares tumbled 29 percent last week, and Moody’s Investors Service and Standard & Poor’s downgraded the Mexico City-based company’s credit rating, after it failed to make a $31 million interest payment.
"The expectation that this will help the company stabilize, at least for the moment, could be provoking the rally," said Gerardo Cevallos, a Mexico City-based analyst at Vector Casa de Bolsa SA. "Until we know what the company will do, the volatility will remain."
In addition to the government’s comments, ICA’s shares are being helped by Petroleos Mexicanos’s announcement of a $23 billion investment in six refineries. Because the builder has expertise in such projects, that’s fueling speculation it might be a candidate to win work contracts, according to Rafael Elias, the head of emerging-market strategy at Cantor Fitzgerald.