04 July

BMV BREAKS THE 50-THOUSAND POINT CEILING (MILENIO DIARIO 26) For the first time in history the Mexican Stock Exchange (BMV) surpassed 50-thousand points reaching its tenth maximum peak in the year. S&P/BMV IPC, the reference, moved 0.50 percent to 50 thousand 109.16 points, 251.67 above its previous score. The index moved ahead thanks to Grupo México gains at 2.94 percent; Grupo Lala, at 2.71; Cemex, 2.70; Grupo  Financiero Santander, 1.99;Gruma, 1.71, Volaris, 1.66 percent... In the exchange rate market the Mexican peso depreciated 0.33 percent vs. the US dollar; interbank exchange rate was 18.20 pesos, 6 cents above its previous value, reported Banxico; at the banks, US dollars were sold at 18.55 pesos and bought for 17.75 MXP.

05 July

APRECIATION OF THE PESO WILL BENEFIT BMV COMPANIES. (EL ECONOMISTA 1-8) The companies listed in the BMV that benefit most from the recovery of the Mexican peso vs. the US dollar are the ones with high levels of debts in dollars like América Móvil, Cemex, Alfa, Grupo México, and Elektra, to mention a few... The director of securities analyses for MetAnálisis, Gerardo Copca, pointed out that companies involved in the importing sector also stand to benefit from local currency re-valuation. These firms include Kimberly-Clark, Liverpool, Walmart, Alpek, Lenova, andGruma.

VELASCO OPENS A REPLICA OF THE SISTINE CHAPEL (EL FINANCIERO 47) (CAPITAL MÉXICO 12) (EXCÉLSIOR 14) (REPORTE INDIGO 4) (MILENIO DIARIO 43) In Chiapas, governor Manuel Velasco Coello inaugurated an exhibition of a replica of the Sistine Chapel that will display 2 million 700 thousand photographs of religious art in Tuxtla Gutiérrez, the state capital. The exhibition was installed in the stadium where Víctor Manuel Reyna highlighted that the event would bring art and culture to the population, in addition to providing the state with another international tourist attraction. State governor Mario Manuel Velasco Coello expressed his gratitude for the trust exhibit sponsors and organizers like Grupo Banorte andMaseca placed on Chiapas to display this 22 meter high, 67 meter long, 28 meter wide, 510 square meter piece of art…

7 July

GRUMA INVESTS 25 MILLION DOLLARS TO EXPAND A PLANT IN NUEVO LEÓN (EL FINANCIERO 19) After a 25 million dollar investment,Gruma concluded the expansion of its fifth plant in Nuevo León. The firm reported that last April it completed the expansion work on this plant located in Apodaca. Production capacity increased 62 percent, from 18,500 tons per year to 30 thousand tons a year.Gruma indicated that this Mission Foods Mexico plant can double its capacity using new equipment (without adaptations to the nave) to produce between 60 thousand and 65 thousand tons per year.

12 July

THE COUNTRY IS SELFSUFFICIENT IN CORN PRODUCTION, SAYS GRUMA (MILENIO DIARIO 29) (MILENIO ON LINE 0) Even though the section on risk factors inGruma’s annual report mentions a potential price hike in US corn, in the past and to date the company has been able to reflect cost increases or decreases in the price of its products. The firm detailed that for its corn flour production in Mexico it only imports between 10 and 15 percent of its grain requirements, and that in the event of an unexpected turn it is ready to buy its entire corn requirements, because the country is self-sufficient in grain for tortilla production. If an extraordinary situation arises,Gruma can import corn from other parts of the world at the same international price established by the Chicago Mercantile Exchange (CME).

13 July

COMPETITIVENESS AMONG MEXICAN GLOBAL COMPANIES (MUNDO EJECUTIVO 112-121) Mundo Ejecutivo magazine publishes itsGlobal Mexican Company Competitiveness Rankingin whichGrupo  Industrial Maseca came out 11th (country ranking), 17th (general ranking), 19th (brand ranking), and 34th (revenue ranking).

HYBRID TRUCKS… CHARGE! AT THE 2017 CARRIER SUPPLIERS EXPO! (TRANSPORTES Y TURISMO 43) Because of increasing demand for cleaner vehicles, Hino Motor Sales México supplied four hybrid trucks toGrupoMaseca and Key Química. Both companies seek, on one hand, to become more sustainable, and on the other, to use fuel more efficiently. During its participation in Expo Proveedores del Transporte 2017, the firm delivered two model 816 vehicles toGrupo Maseca, taking the latter’s total hybrid vehicle count to 33 out of the 100 vehicles supplied by Japanese Hino Motor Sales. Rolando Montes, Director of Acquisitions forGrupoMaseca, pointed out that in the company’s four years of trade relations with Hino, fuel consumption has shown a favorable reduction, because the total cost of operating the fleet, in addition to the being able to be on the road every day have translated into higher profitability.

19 July

ALFREDO HUERTA/FINANZAS 24 (24 HORAS 15) …we are following up on companies’ potential for securitization at a good moment in the stock market, with inflows from ownership abroad and company growth. In the first of these two groups, the 10 most effective companies according to information from the BMV at the end of June 2017 are in order of importance: Walmex, on an upward month by month trend, GFNorte, AMX, GMéxico, Cemex, Femsa, Naftrac (ETF of the exchange index), Fuño (Fibral), Alfa, andGruma…

ALERT OF THE DAY (EL ECONOMISTA 2) (EL UNIVERSAL 4) Today information on new houses being built and construction permits for the month of June will be released in United States. In Mexico no relevant data are expected. There is expectation however to see the financial reports of Arca Continental andGruma, both issuers are a part of the S&P/BMV IPC sample.

20 July

GRUMA EBIDAT GROWS 7% (EL NORTE) (REFORMA 5) (EXCÉLSIOR 2) (EL FINANCIERO 20) (LA JORNADA 18) (MILENIO DIARIO 30) (EL UNIVERSAL 4) After an increase in sales volumes and values in both United States and Mexico,Grupo Maseca(Gruma) recorded a 7 percent rise in its operations flow when it reached 2 thousand 835 millions of pesos, which translated into a 16.3 percent Ebitda margin relative to sales. According to a company report, the largest corn flour and tortilla producer in the world added 17 thousand 437 millions of pesos in sales during the second quarter of 2017—a 7 percent increase vs. the same period in 2016. Operating profit percentage was just as good after adding 2 thousand 344 millions of pesos, while majority net profit rose 1 percent, to one thousand 432 millions of pesos.

ALICIA SALGADO: GRUMA EARNED ONE THOUSAND 479 MILLON PESOS IN PROFITS.   (ENFOQUE (MATUTINO) )Alicia Salgado:Gruma released its results in Mexico yesterday. The second quarter of 2017 was truly significant for the company that reaped historical earnings before taxes in the amount of one thousand 479 millions of pesos.An all time high even though it has maintained an important rate of investments particularly from sales from its operations in United States and in Mexico. Corn flour, tortilla, and wrap production increased 7 percent in these two markets.  Total sales were 17 thousand 437 millions of pesos. Meanwhile, the firm announced 61 millions of dollars  in capital investments to expand in United States or build a new generation tortilla plant in Dallas, and expand capacity at its corn flour plant. In Mexico investments will go towards technological updates in all of its plants; in Europe, to build a tortilla plant in Russia, and another in Holland, Asia and Oceania. The company also intends to expand its tortilla plants to include Australia.

21 July

THE 300 MOST INFLUENTIAL LEADERS OF MEXICO 125/132 (LÍDERES MEXICANOS 196-198) Líderes magazine publishes a list of the 300 most influential leaders in Mexico.  The list includesJuan Antonio González Moreno, President of the Board of Directors and Chief Executive Officer of Gruma and Gimsa.

THE 300 MOST INFLUENTIAL LEADERS OF MEXICO / 139-146. (LÍDERES MEXICANOS 204-205) Líderes magazine publishes a list of the 300 most influential leaders in Mexico. Ranking at 146 isCarlos Hank González, president of Grupo  Financiero Banorte,Vice-President ofGruma and Director General of Grupo  Hermes.

ROBERTO AGUILAR / MOMENTO CORPORATIVO. (CAPITAL MÉXICO 20)Gruma -Gaining Momentum.Gruma Is Gaining Momentum. Although the firm presided over byJuanGonzálezMoreno was one of the most strongly impacted by stock market volatility, yesterday’s more than 6 percent rise in José Oriol Bosch’s BMV reflectedGruma’s financial results for the second quarter.  Sales exceeded 17 thousand 400 millions of pesos, while the company also showed a substantial improvement in its outlook thanks to its international operations and its constant operating improvements.

GRUMA SETS A NEW RECORD EBITDA AT THE END OF THE QUARTER.   (MILENIO NOTICIAS (08:00 A 10:00) )  

SECURITIES MARKET REPORT (FÓRMULA FINANCIERA (NOCTURNO) ) (EL ECONOMISTA 4) (EL ECONOMISTA ON LINE 0)Marco Antonio Mares: Today’s markets were full of surprises. Here in Mexico City, the IPC of the Mexican Stock Exchange rose 0.11 percent: 57.21 units at 51 144.14 points. The Exchange held on to positive numbers and recorded this 0.11 percent gain on the fourth day of the week.  It gained 57.21 points and remained above the 51 thousand-point mark. The Exchange resisted letting go of this level of results supported by good quarterly results such as the ones obtained by Gruma, which were in line with market expectations.In the Mexican Stock Exchange, 58 issuers showed gains, whereas 51 ended with a decline in results, and nine remained unchanged.  Gruma headed the list of securities with yields during the closing session with a 6.98 percent profit, followed by Ideal with a 3.94 percent increase, and GEO and ICA moving forward at 3.76 and 3.31 percent.

GRUMA: CORN HEDGES IN THE US. (EL NORTE (ON LINE) 0) In order to protect itself against an increase in corn prices, since yesterdayGrupoMaseca(Gruma) hedged 50 percent of its supply for United States in 2018, statedRaúlCavazos, finance directorfor the company. During a phone conference with analysts, he indicated thatGruma is still in the process of increasing hedging. “Yes, we are in the process of hedging a little more because we feel corn prices will be higher in the weeks ahead,” he pointed out.

22 July

GRUMA CONCLUDES ITS PURCHASE OF GRUPO INDUSTRIAL MASECA. (EXCÉLSIOR 11)Gruma reported the conclusion of the public bid for up to 14.5% of the capital stock ofGrupoIndustrial Maseca, (GIMSA). According to a bulletin from the Mexican Stock Exchange  (BMV),GRUMA acquired 14.29% of GIMSA’s capital stock making the former the owner of 99.79% of the latter. On 26 June,Gruma explained it would offer up to 3 thousand 329 million pesos for GIMSA stock it did not have yet in order to remove the company from the Exchange.

24 July

TRENDS (EL ECONOMISTA 7)Gruma moves forward.Gruma was the issuer with the highest yield last week in S&P/BMV IPC. On the week ending on 21 July, the price forGruma stock rose 6.59% to 251.65 pesos per unit; the best weekly closing since last April. GBM analysts highlighted that the rise inGruma’s consolidated income plus “fixed prices in Mexico, in combination with a 4% growth in volumes bolstered Maseca’s 10% annual growth in income”.Gruma reported EBITDA at 2,835 millions of pesos, in line with the estimate made by Citibanamex, above the consensus, and +7% a year. “The Group’s sales increased 7%, mainly because of larger Gimsa sales. EBITDA margin for the group grew 10 basis points, to 16.3%. Net profit was in line with our estimate”, explained Citibanamex in its analysis.

25 July

THE EXCHANGE AT A RECORD HIGH (IN PESOS) WHO TOOK IT SO FAR? (EXCÉLSIOR 8) This year, S&P/BMV IPC has grown 13.2% in Mexican currency and yesterday reached a new historic high.  In dollars, however, this rise is even more spectacular: 32.5%, which makes it one of the best exchanges in the world in 2017. Consumer goods companies that have resisted inflation and the airport sector are two areas that standout in current stock market dynamism… A basic consumer goods company that has been excluded from the trend isGruma. About 75 percent of its income comes from abroad, so high prices for US dollars benefit the firm when it brings its profits back to Mexico. Therefore,Grumastock has performed contrary to the peso because when Mexican currency depreciated,Grumastock soared…Gruma is the best stock in this government administrationafter rising almost 600%. Another case similar toGruma’sis José Cuervo, which is speculated to be included in the IPC in September…

VENEZUELA MUST PAY ALMOST 490 MILLION DOLLARS TO GRUMA (EL NORTE ON LINE) (EL ECONOMISTA 67) (MILENIO DIARIO 37) (EXCÉLSIOR 2)Gruma’s Spanish subsidiaries, Valores Mundiales and Consorcio Andino, were awarded a ruling against Venezuela that expropriated their operations there. Now the country must pay about 489.9 millions of dollars for damages, interests, and legal expenses.  Arbitrage began in May 2013 with a request for indemnity for damages and losses incurred after Venezuela imposed several measures such as the 2010 Expropriation Decree that affected the company’s investments in its Venezuelan subsidiaries, Molinos Nacionales (Monaca) and Derivados de Maíz Seleccionado (Demaseca).

29 July

FAVORABLE RULING FOR GRUMA IN VENEZUELA(ENFOQUE (MATUTINO)Francisco Garduño: Mexican consortiumGruma was awarded a favorable ruling in Venezuela, in which a judge urged the South American country to pay about 484 millions of dollars for damages and losses experienced byGruma’s Spanish subsidiaries. The matter dates from 2013, when a complaint was filed after the Expropriation Decree of 2010. Venezuela could request annulment of the award and a suspension of execution while these proceedings continue.

WHO ARE OUR NEIGHBORS BELOW? (EXPANSIÓN 103-115) Every time the US economy puts us in a difficult situation, experts talk about reducing our dependency on the US.  But, we never do (or dare to.) Today in view of potential threats in NAFTA renegotiations, the obvious choice, once more, is to look elsewhere, so why not south? Latin America is unknown territory for Mexico in terms of bilateral trade. Expansión magazine published a ranking of the 500 most important companies in Latin America in which Gruma ranks 148 (rk 16), 152 (rk 15).