For Mexico's Biggest Winners and Losers in 2015, Peso Was King

  • Mexican currency's 15% depreciation fuels stock performance
  • Airport operator GAP gains most, builder ICA falls most on IPC

It wasn’t just currency traders watching the Mexican peso in 2015 as it tumbled to a record. The biggest gains and losses on the stock market were also driven by the currency’s slide.

Grupo Aeroportuario del Pacifico SAB, the airport operator known as GAP that serves cities including Puerto Vallarta, led advances on the benchmark index with a 66 percent gain as U.S. travelers flocked to the Latin American nation to take advantage of a strong dollar. Meanwhile the peso’s worst year in eight pushed builder Empresas ICA SAB, which had debt in dollars and revenue primarily from domestic projects, to default on $1.35 billion in bonds as its shares tumbled 80 percent. The IPC index lost 0.3 percent in 2015.

Mexican Stock Performance in 2015 Tied To Peso

The peso slid 15 percent in 2015 as falling crude prices damped investment in the energy industry and expectations for U.S. interest-rate increases boosted demand for greenbacks. Even as constitutional changes to open the oil and telecommunications industries prompted more competition and helped fuel a region-leading seven initial public offerings this year, the currency’s plunge dominated the performance of many shares on the exchange.

“It had a direct impact on the winners and losers this year,” Aldo Miranda, an equity sales trader at CI Casa de Bolsa SA, said in a telephone interview from Mexico City.

In October, GAP’s Chief Executive Officer Fernando Bosque said on a conference call that the strong dollar has had a positive effect on non-aeronautical revenue in Mexico. In response to questions on the share performance, the company said Wednesday that the impact from the peso was “very marginal.”

Both the company’s domestic and international passenger traffic were on course this year to beat 2014’s numbers, the company said at the start of December.

Gabriel de la Concha, then ICA’s chief financial officer, said in its third-quarter conference call that its results had been “dominated by the large exchange loss from the depreciation of the peso.” The Mexico City-based builder declined to comment further.

Gruma SAB gained the second most on the IPC in 2015 after a measure of earnings rose 25 percent in the third quarter. That was due in part to “the peso weakness effect,” Chief Financial Officer Raul Cavazos said on an Oct. 22 conference call. The world’s largest tortilla maker sells about 75 percent of its products outside of Mexico. A company press official didn’t respond to an e-mailed request seeking additional comment.

Cement-maker Cemex SAB fell 36 percent this year as its cost to service overseas debt increased amid what Chief Executive Officer Fernando Gonzalez said in October was the “unprecedented strength of the U.S. dollar versus most of the currencies in our markets.” Jorge Perez, a spokesman for Monterrey, Mexico-based Cemex, declined to comment on the peso’s impact on share performance.

— With assistance by Isabella Cota, and Adam Williams

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