GRUMA TRENDS (EL ECONOMISTA 7). Last week this issuer saw a rise in the price of its shares in the Mexican Stock Exchange. Gruma shares rose 4.39% to 274.64 MXP per unit.

THE BOSSES (EL FINANCIERO 18) Will Lala increase prices after the recent hike in gasoline prices, the 'gasolinazo' as it is commonly referred to in Mexico? Mexico woke up to higher gasoline prices last 01 January, which will not only result in higher passenger fares, but also higher freight costs, and therefore, higher prices on products like milk. According to experts, one of the most sensitive industries to higher gasoline prices is the food and beverage industry, where fuels on average account for 4 to 6 percent of their costs, sales and administration expenses because most companies in the sector maintain large distribution networks. According to Santander, Gruma, the leading corn flour producer in the world, is the least vulnerable, whereas Lala, the major milk producer and seller in Mexico, could be the most affected by the increase…

JULIO BRITO/RISKS AND YIELDS (LA CRÓNICA DE HOY 20) … It is ridiculous and financially unreasonable for the President of the United States to dispute Ford’s 1.2 billion dollar investment in the course of three years. The only gain there is media impact. In the past seven years, Mexican companies have made direct investments in the United States in the amount of 17 billion dollars… Cemex, for example, is one of the most important cement producers in California; Gruma sells its fried products all over the country where Nacho sales continue to grow during major sports events…

FAVORITES: AC, GRUMA AND SORIANA (EL ECONOMISTA 8-9) In the first days of an uncertain and volatile year, there is a list of companies whose estimated growth in income, better operational efficiencies and solid fundamentals should generate attractive value, which makes these companies a good bet for 2017. According to Actinver Casa de Bolsa, there is a group of companies listed in the Mexican Stock Exchange that will continue to be an option for investment, as they have proven able to defend themselves in this environment. They are Arca Continental, Gruma, corn flour producer, and Soriana, a self-service store chain...

TRUMP’S BULLYING ALSO AFFECTS THE TEXTILE AND AGRIFOOD INDUSTRIES (NEGOCIOS EN IMAGEN ) Darío Celis: Trump and all this bullying against investments made in our country by companies not just from the United States has largely focused on automotive businesses, and particularly on assembly plants, but there are other highly trade-intensive sectors, innate exporters, that are not in the automobile business. Important companies in the agrifood industry like Bimbo, Gruma, and Arca Continental will resist the Trump effect thanks to their operations in the United States.

TRENDS (EL ECONOMISTA 7) GRUMA. Actinver foresees a good year for the company that will see a 25% increase in its price.

IN THE LAND OF TRUMP (EXPANSIÓN 30-31) Some Mexican companies could benefit from the new US President’s economic policies; specifically those involved in consumer goods and construction. Donald Trump has customarily referred to Mexico in an insulting or threatening manner... What he is not saying is that investments made by private Mexican companies in the United States have exploded in recent years growing from 5.3 billion dollars in 2006 to 16.6 billion in 2015, according to the Mexico Institute of the Wilson Center. Companies like Bimbo, Gruma the tortilla manufacturer, the Arca beverage company, and Mexichem the chemical conglomerate have invested in the United States through subsidiaries… Greater Consumption. If Trump keeps his promise and lowers taxes, people in the United States will have more money in their pockets, which will stimulate consumption at the risk of an upturn in inflation. In this sector there are 2 Mexican firms with an important presence in the United States: Gruma and Bimbo. These companies also stand to generate more income due to a strong dollar. “United States accounts for 60% of Gruma’s total sales and 45% of Bimbo’s total sales,” explained Jerónimo Contreras, GBM analyst… Conversely, Gruma’s number one product – corn tortillas – is a staple that affords flexibility to raise prices in Mexico without affecting volume, which makes the flour company “an all around exchange rate winner,” says Contreras. Corn tortillas have experienced strong growth in the United States, added the GBM expert.

RANKING: 100 COMPANIES THAT GIVE IMPULSE TO MEXICO AND UNITED STATES (MUNDO EJECUTIVO PAG. 64) Mexico needs United States as much as United States needs us. Both nations need each other because the bonds established through the years unite them, and neither country will benefit from breaking them… In the above-mentioned ranking Grupo Industrial Maseca holds the 24th position.

CINÉPOLIS WILL BECOME THE LEADING MOVIE THEATER CHAIN (EL ECONOMISTA PP-17) Cinépolis has stated that in 2016 it may have become the largest movie theater chain in the world, toppling Cinemark… If this news is confirmed, Cinépolis will join a select group of Mexican companies heading world sales in their core products. In fact, it would become the first services company to join the list of Mexican global leaders that includes Bimbo, with bakery products; Femsa, a Coca Cola bottling company; and Gruma, producing tortillas and corn flour.

EXCHANGE RATE WILL FAVOR GRUMA (EL NORTE (ON LINE) 0) (EL NORTE (ON LINE) 0) 2017 will be a year of robust sales and good results for Gruma in the United States. Forecasted by Héctor Maya, a Vector Casa de Bolsa analyst, these excellent expectations can be attributed to US consumers’ growing trust, and product restructuring on the part of Gruma. Company information reveals that United States accounts for 60 percent of its income, thus, sales in dollars will make a major contribution to its consolidated results.

GRUMA BOLSTERS DIVERSIFICATION (REFORMA 5) (NORTE 17) (MURAL 13) Interview with Juan González Moreno, Gruma President and CEO: Please describe Gruma’s current world presence. Gruma is a global company and the world leader in corn flour and tortillas. Our operations in 120 countries and production plants in 4 continents, fill us with pride because they prove Mexico can compete in a globalized world with the very best multinational companies. Today, about 75% of our consolidated sales, and 72% of consolidated EBITDA come from operations outside of México. Operations in the United States in particular, respectively generate around 56% and 60% of our sales and consolidated EBITDA. Mr. González Moreno adds, “Gimsa recently raised corn flour prices to reflect MXP depreciation vis-à-vis the US dollar, which directly impacted the cost of important inputs like corn, additives, packaging, gas and other fuels, all of which are quoted in dollars, and also to account for internal inflation. These higher prices coincided with the end of the domestic winter corn harvest, so the cost of Gruma’s main raw material, corn, will remain fixed until next June, when the new summer corn harvest comes in. Corn prices as well as the prices of other products and the exchange rate will be analyzed at that time to determine whether or not prices need to be modified for the second half of the year.

AC AND GRUMA DISMISS PRICE INCREASES (REFORMA 5) (EL NORTE (ON LINE) 0) (EL UNIVERSAL 3) (LA JORNADA 24) (EXCÉLSIOR 2) (EL FINANCIERO 18) (EL ECONOMISTA 16) (LA RAZÓN 21) (EL SOL DE MÉXICO PP-1-3) (EL HORIZONTE) (EL PORVENIR) (LA CRÓNICA DE HOY 25) After increasing corn flour prices 0.7 on account of increased gasoline prices, Gruma committed to keeping its price steady during the first half of the year. On the occasion of the signing of the Acuerdo para el Fortalecimiento Económico y la Protección de la Economía Familiar (Agreement to Promote the Economy and Protect Household Incomes), Grupo Industrial MASECA announced its commitment to maintain its previously announced price for corn flour during the first half of 2017. 

PEÑA RECOGNIZES MASECA FOR NOT RAISING PRICES (MILENIO DIARIO 29) (LA JORNADA 22) (EL UNIVERSAL pp-8) (EL NORTE (ON LINE) 0) (MILENIO TV) (ONCE NOTICIAS TV) President Enrique Peña Nieto recognized Grupo Industrial Maseca’s pledge to maintain a fixed corn flour price during the first half of the year. He highlighted that this initiative adds to the Acuerdo para el Fortalecimiento Económico y la Protección de la Economía Familiar (Agreement to Promote the Economy and Protect Household Incomes). “I recognize Grupo Industrial #MASECA for its contribution to the Acuerdo para el Fortalecimiento Económico y la Protección de la Economía Familiar”, the President indicated in his Twitter account. He mentioned that coming from the leader in corn flour production, such an initiative contributes to stable prices that benefit Mexican families. “This Mexican company has made the commitment to maintain fixed prices on its corn flour during the first half of 2017... in favor of family budgets”, he added in Twitter.

MEXICO’s 10 STRONG BRANDS (PUBLIMETRO 14) Maseca. Founded in 1949, Gruma is one of the largest corn flour and tortilla producers in the world and Maseca is its most famous product recognized by all Mexican families. The company’s corporate offices are in San Pedro Garza García, Mexico, and it has operations in United States, Central America, Europe, Asia, and Oceania.

WINNERS / LOSERS. (FORBES MÉXICO 10) Winners. Juan Antonio González Moreno, +6.9%. Gruma worth 113,860 million MXP. Company in a positive environment. It benefitted from the fact that more than 67% of its income is in dollars and Euros, as well as from sales recovery in the United States as a consequence of an improving food market.

ONLY 15 % OF ISSUERS IN THE MEXICAN STOCK EXCHANGE HAVE OVERCOME THE TRUMP EFFECT. (EL ECONOMISTA 9) There are 141 issuers in the Mexican Stock Exchange (BMV) and only 15% of these (21) have been able to overcome the pressure and volatility unleashed by the US elections on November 08. Of these 21 winning issuers, 52% are part of the Índice de Precios al Consumidor (IPC Index) while the rest operate in the secondary securities market. Gruma is one of these issuers that have made progress in uncertain times. The food company’s stock has climbed 6.79% to 256.68 pesos since 08 November.

TRENDS (EL ECONOMISTA 7) GRUMA. According to GBMhomebroker, Gruma could benefit from NAFTA and MXP volatility vs. the US Dollar. Gruma shares in the BMV rose 4.49 percent.

IN 2017 IT WILL BE DIFFICULT TO MAKE MONEY IN THE MEXICAN STOCK EXCHANGE (EL FINANCIERO 21) Mounting pessimism about the business climate in Mexico derived from local and external factors will make earnings in the Mexican Stock Exchange difficult this year. Analysts from different financial groups are suggesting caution. Ana Sepúlveda, Assistant Director of Analysis for Invex, stated that a discreetly “defensive” portfolio would include about 60 percent assets able to control risk such as the more solid issuers in the IPC. It is also a good idea to actively bet on issuers with a robust balance offering basic consumer products or protection against inflation. Arca Continental, Pinfra, and Gruma are a few of the options, she states.

INCREASINGLY AMERICANIZED MEXICANS (EXPANSIÓN 66-67) Mexican companies have a lot to lose during the Trump era, particularly those that make significant product shipments to the United States like automotive and farming businesses. Nevertheless, analysts agree that national companies with plants and operations in the United States (and that consequently produce income in dollars) may come out ahead. Some companies in the food business will also benefit from dollar appreciation. Bimbo, with more than 80 bakery plants in the United States, and Gruma, with 26 tortilla and fried product plants, are well positioned. Besides, Gruma commands between 45 and 50% of tortilla sales in the US, according to its most recent conference on financial results in October 2016... During 2017, Gruma plans to focus its business strategy on the wholesale restaurant and food service market. “The tortilla category has been growing 5% in the United States while company growth has exceeded the average at 8%, particularly in southern United States”, noted Raúl Cavazos, CFO for the firm, during the conference with analysts.