IRASEMA ANDRÉS DAGNINI/CUENTAS CLARAS (LA RAZÓN 23)

Public Mexican companies reported that most of them were able to improve their growth conditions in the first quarter of the year, which should encourage investors to take new positions and forecasting a greater valuation from issuers. According to a report prepared by Casa de Bolsa Monex, approximately 76% of the companies that filed their quarterly report on time reached or exceeded estimates made by analysts. From a sample of 38 companies, sales in the first quarter of the year, compared to the same period in the previous year, had an average real growth of 10.1%, emphasizing the efficiency of ALSEA (84%), ASUR (29%), BOLSA (28.5%), and PINFRA (31%), although this universe of only five companies reported a decrease in their revenues. On the operating side, the EBITDA (earnings before taxes, interest, depreciation, and amortization) showed a moderate increase of 15.2% and the actual results exceeded market estimates by 3.4%. Furthermore, the Company’s net income increased 10.4%, with the following companies leading the best results: ALSEA (244%), BIMBO (111%), COMERCI (70%), GRUMA (58%), PINFRA (67%), and TELEVISA (70%).

THE MONTERREY, NUEVO LEÓN INDEX IS MORE PROFITABLE THAN THE CPI (EL ECONOMISTA 5)

In the first four months of 2015, the Index established in the Northern Mexican State of Nuevo Leon registered an improvement of 3.98%, exceeding the Consumer Price Index (CPI) of the Mexican Stock Exchange (BMV), which has yielded 33%. The issuers that shifted towards the index for companies from Nuevo Leon were Axtel, Lamosa, and Grupo Financiero BanRegio, with earnings of 32%, 20.7%, and 18.5% respectively… The companies that benefited the most from this indicator in the last 12 months include Gruma, OMA, and Lamosa, with improvements of 60.1%, 59.4%, and 25.3%, respectively.

THE STOCK EXCHANGE RECOVERS 45 THOUSAND UNITS (EL NORTE 0)

Consumer Price Index (CPI) of the Mexican Stock Exchange began the week on a positive note, since it gained 1.47% or 656 units, at 45,238.47 points. Lala (LALAB) was the purchasing leader with a revaluation of 5.12% to MXN 32.66 per share, followed by Gruma (GRUMAB) with 4.27% to MXN 192.88 , and Mexichem’s purchases (MEXCHEM*) increased 4.19% to MXN 45.78. The purchasing tendency extended from the European and U.S. markets, which closed with moderate gains.

DAVID PÁRAMO/RENOWNED INDIVIDUALS (EXCÉLSIOR 4)

The case of Jorge Vergara and Angélica Fuentes, where the limits between public and private life are easily blurred, is practically non-existent, and they are not unique or uncommon in a country in which companies and entrepreneurs do very little to have institutional, rather than family businesses, with defects that are just as serious, or more serious, than SMEs. Last year, we witnessed how the heirs of Mr. Roberto González Barrera were able to resolve their differences in order to keep firm control of Gruma and how they continue to make daring efforts to fully consolidate control over the Ixe-Banorte financial group…

HÉCTOR O. ROMERO / INSIGHTS WITH SIGNUM RESEARCH (EL ECONOMISTA 6)

Corporate reports at the first quarter of this year show a slight improvement compared to the reports for the fourth quarter 2014, but they also show great progress when compared to the first, or even second quarter of 2014, especially for consumer companies that were seriously affected by the tax reform that became effective in January 2014. In fact, for this quarter, we find 18% excellent reports, compared to 9% in the 4^th Quarter of 2014, and 35% that are good reports… However, GRUMA obtained good results as a result of its strategy to find profitability from the development of value-added corn products. OHL has also achieved excellent results, but the recent corruption and fraud allegations that these results could bear will give rise to considerable volatility in the price of these securities; therefore, they are not covered by Signum Research…

TENDENCIES. (EL ECONOMISTA 7) GRUMA.

The maximum price reached by the Company’s shares in the last 52 weeks was MXN 209. During the same period, the minimum price registered for these shares was MXN 118.42. So far this year, the Company’s shares have increased 20.6%.

CARLOS PONCE B. / STOCK MARKET ENVIRONMENT (EL ECONOMISTA 19)

Thursday, April 30, marked the deadline the period for quarterly financial reports filings for companies listed on the Stock Exchange during the first quarter of 2015. This is a very important event, because participants can only validate and/or modify the estimates, and consequently certain target prices, four times a year. This review is common international practice…Gruma is included in the table of Reports with the highest operating growth (EBITDA) on the Stock Exchange.

CPI COMPANIES PAY MORE DIVIDENDS (EL ECONOMISTA pp-10)

During this year’s dividend payment season, issuers listed on the Sustainability Consumer Price Index of the Mexican Stock Exchange (BMV) exceeded the amount disbursed for this item in cash by 41.6%, totaling MXN 70.220 billion, compared to the total amount accumulated in 2014, which totaled MXN 49.576 billion, showing figures from Economática…Gruma appears on the list of The Most Generous Companies…

STANDARD & POOR'S INCREASES GRUMA’S RATING (MUNDO EJECUTIVO 106)

Due to its solid profitability and decreasing debt levels, the rating agency Standard & Poor's increased Gruma’s credit and debt risk ratings from BB to BBB, with a stable perspective. Standard & Poor’s explained that this increase in the Company’s rating reflects the expectation that it will maintain a moderate financial policy and a discretionary cash flow debt of approximately 15%. The factors that the rating agency took into account to improve the assessment of the multinational Company consist of focusing on fundamental businesses with products that are profitable and that provide added value. “An example of the above is that in December 2014, the Company completed the sale of its all-purpose-flour operations in Mexico, and it used the funds to pay its debt, strengthening its financial structure,” the rating agency explained in a press release.

THE TOP 100 MEXICAN EXPORTERS (MUNDO EJECUTIVO 3-34-53)

Foreign trade can be an alternative to help a company face the natural saturation of the Mexican market, improve its performance, and increase its competitively. But, which are the growing markets? What products or services have the best chance? In a historical context, Mexico has stood out from the rest of the world because it is very colorful. We have always seen life as multicolored; Mexico’s handicrafts, cloths, and even its traditional food are characterized by their colorfulness. Gruma is ranked ninth on the list of the top 100 exporting companies.

ALBERTO BARRANCO/COMPANY. (EL UNIVERSAL 4)

The North American Free Trade Agreement has yet to be “updated.” Mexico has recently agreed to what is classified as “modernization” of what it signed with the European Union 15 years ago in a context that included the political scenario and protecting investments. Although the Ministry of Economy has proposed opening up negotiations as a Mexican initiative, in reality, the petition came from the counterparty as an attempt to even the playing field by reviewing a similar agreement with the U.S...The balance is meager. Very few Mexican companies have arrived at this area, with an emphasis on Spain. This means companies such as América Móvil, Bimbo, Gruma, and Mexichem...

RELEVANT BUSINESS ISSUES (MILENIO NOTICIAS (07:00 A 08:00)

Bárbara Anderson: Undoubtedly, corporate offices from the Northern Mexican State of Nuevo León are giving people something to talk about. Yesterday, it was the multi-million peso sale of containers that Vitro made to a U.S. company, and nowGruma announced that between now and the end of the year, it will make a USD 300 million investment in order to increase its production capacity and enhance its manufacturing process and technology.

The Company is also considering the possibility of making certain purchases, as reported in its annual report known as the “20F,” which it submits to the Securities Commission in the U.S. The funds projected byGrumarepresent a 132% increase, compared to total investments made in 2014, which only totaled USD 128 million.

Let me tell you, Magda, this Company that is presided and lead byJuan González Moreno, is going to finance estimated investments with debt and with resources that have been generated internally. For its division,GrumaCorporation, which handles supplying none other than the U.S. and Europe with tortillas, cornmeal, and grits, forecasts that its investments will total approximately USD 150 million? Moreover,Grupo Industrial Maseca, which is a subsidiary whose main market is Mexico, is going to invest another USD 47 million to increase production.

So, this is very good news forGruma, and Vitro, on the other hand, will surely receive fresh money to continue to grow the businesses remaining in these corporate offices.

FIRMS FROM THE NORTHERN MEXICAN STATE OF NUEVO LEÓN WILL PAY DIVIDENDS ONCE AGAIN (EL HORIZONTE ONLINE 0)

After 2013 when, due to the income tax reform of 2014, corporate offices from the Northern Mexican State of Nuevo León distributed dividends in advance, they will once again give this benefit to their shareholders in 2015, and the largest amount of MXN 7.35 billion, was paid out by FEMSA. Other large amounts were paid by KOF, in the amount of MXN 6.405 billion; Arca Continental, in the amount of MXN 2.82 billion; Gruma, in the amount of MXN 692 million; Grupo Financiero BanRegio, in the amount of MXN 295 million; Alfa, in the amount of USD 155 million; and Alpek, which offered USD 95 million. Carlos González, analysis director of Banco Monex, underlined that many companies paid the dividends in advance to be able to save some money in 2014, but this year, not much more can be done, and the tax portion has practically been included.

GRUMA TENDENCIES AND TRENDS (EL ECONOMISTA 7)

The manufacturer of cornmeal products announced that it plans to invest USD 300 million in 2015, and stated that the funds will be obtained from debt issues and resources generated by the Company.

DAVID PÁRAMO/ RENOWNED INDIVIDUALS (EXCÉLSIOR 4)

There is no question about the fact that Roberto González Barrera had full control of Grupo Financiero Banorte and Gruma, so upon his death, there were many who wondered how the institutionalization process would be carried out and what the future of both companies would be. In Gruma’s case, the process has been both discrete and successful. Perhaps one of the easiest ways to measure the success of Juan González’ management is the return on this Company’s shares in the stock market. González Moreno’s management at the helm of the company as President and CEO since 2012 has led it to focus on businesses in which it has a clear competitive advantage, as well as market leadership. The Company has left businesses that were attractive at a given point in time, but that were inconsistent with the Company’s essence. This has allowed the Company to make much more rational investments in both capital and the labor, as well as a reduction in the Company’s costs. For example, it canceled its sponsorship of the Mexican National Soccer Team that cost MXN 25 million but brought no returns in terms of sales…  

SIX MEXICAN FIRMS THAT INVEST IN INNOVATION. (EL FINANCIERO 18)

Despite of the fact that Mexico only invests 0.5% of GDP in research and development (R&D), which is less than Argentina and Brazil, certain Mexican companies stand out because they have decided to venture into this sector. Peñoles, Cemex, Alfa, Gruma, Softtek, and Herdez are at the top of the list of companies that invest in R&D. Altogether, these corporations allocated almost four billion pesos to R&D last year. . In 2014, Gruma invested MXN 153 million in R&D, representing 0.3% of its consolidated revenue. The Company emphasized the work carried out in the cornfields and tortilla production.

IRASEMA ANDRÉS DAGNINI/CUENTASCLARAS (LA RAZÓN 22)

Signum Research put together a model investment portfolio, Signum ROIC (Return on Invested Capital), based on the profitability analysis performed by the Mexican Stock Exchange at I-15, noting the highest weight factors granted to the food and consumption sector (47%), followed by mining and metals (12.4%), and telecommunications (11.1%). For the time being, issuers AMXL, LALAB, BIMBOA, AC*, BACHOCOB, WALMEX*, GMEXICOB, KIMBERA,GRUMAB, MEGACPO, PE&OLES*, MASECAB, CMOCTEZ*, RASSINICPO, and CABLECPO comprise the portfolio, which will be reviewed each time the Mexican Stock Exchange updates its profitability analysis, in order to keep the companies with the highest returns in the portfolio.

TENDENCIES AND TRENDS. (EL ECONOMISTA 7)

GRUMA. Standard and Poor’s upgraded the company’s ratings in view of its robust financial position and its perseverance against the depreciation of the Mexican peso, with approximately 70% of its revenues coming from its operations abroad.

TORTILLAS: A GLOBAL FOODSTUFF. (FORBES MÉXICO 182-183)

When Gruma was created in the middle of last century, its objective was simple: to produce corn flour using an efficient method of industry for the manufacture of tortillas. Although its aim overall was ambitious - until then, the majority of tortillas in Mexico were produced using the traditional slaked corn flour (nixtamal) - this was not the case in terms of its target market: Gruma’s goal was only to serve the northeast of Mexico. Gruma is probably the main reason for the globalization of tortilla consumption, thanks to the method of flour production it uses, which it has since exported throughout the world. However, the Monterrey-based company founded by the late Mexican businessman Roberto González Barrera does not only produce corn flour; it is also the world’s largest tortilla manufacturer, and in some countries it has adapted its industrial operations to cater for local preferences, whether this be the consumption of corn or wheat flour.

TECHNOLOGY UNDERPINS STOCK MARKET PLAN IN AN ADVERSE ENVIRONMENT.(CAPITAL DE MÉXICO 20-21)

Amid concerns over the fall in oil prices and the potential for a hike in the fed rate, the challenge for shareholders is to create a revenue generation strategy to combat this climate. Luis Vallarino, Analysis and Strategy Director at Grupo Financiero Interacciones, believes that the creation of such a tactic would enable the challenges faced by the Mexican Stock Exchange throughout 2015 to be overcome without major complications... According to Vallarino, the issuers favored by Interacciones this year are those companies that are due to benefit from the Energy Reform, and he insists that low oil prices will not affect the investment decisions of the major actors in the energy market. These include Cemex, FEMSA, Grupo Financiero Banorte,Gruma, Genomma Lab, Pinfra and Rassini, all of which have clear short-to-medium term catalysts with which they can thrive in the current economic climate.

ALBERTO CARRILLO / CAPITAL MARKETS. (EL ECONOMISTA 6)

Throughout 2015, we have observed a substantial increase in private consumption in Mexico. According to the latest data for the first quarter of the year, consumption has grown by 4.6% year over year amid increased consumer confidence, which has been reflected by an 8% increase in self-service sales, and 4-5% growth in these stores year over year.  BIMBO, GRUMA, HERDEZ, BACHOCO and BAFAR have all seen increases in their volumes, sales and EBITDA, including double-figure percentage growth for companies including GRUMA, BACHOCO and HERDEZ... The latter registers figures below the industry average and, unlike other Mexican companies such as GRUMA and BACHOCO, its share price is lagging... 

SALO GRABINSKY / FROM THE VERB ENTERPRISE (EXCÉLSIOR 23)

I have just been handed an excellent paper published by global firm Ernst&Young in collaboration with the University of St. Gallen, in which they list the 500 largest global companies following a sound selection process. The results could have been predicted, with dozens of companies based in the United States, followed by companies from the European Community, and Germany, Italy and France in particular. Brazil and Mexico feature most strongly in Latin America with the appearance of familiar names that operate globally (América Móvil, Bimbo, FEMSA, Cemex, etc.)... Although some of the companies listed go as far back as the 17th Century, the majority of firms were created in the late 20th Century. I did notice that the list was missing some Mexican conglomerates including Televisa, Comex (recently sold) and Gruma/Banorte, but that is just a small detail. What is important is that the efforts of company founders and entrepreneurs have grown to such a degree that they now cover a major segment of the productive population, generating tens of billions of dollars in revenue and in many cases staying at the forefront of technological development in their respective fields.