Tag Archives: Mexico

Mexico, Trump won the election

Mexico is an example of a developing country that evolved into an industrial nation amongst the 15 largest in the world in a short period. This is the same country that suffered the bond crisis in the 1980s and that signed the NAFTA with a great positive effect for its economic development. This development has also effects in their financial markets, that boomed with a modernisation after the liberalisation of the sector and the investment of foreign entities.

The line was very positive in the global trend, as it registered a bullish bias the main part of the year. However, there was a break… after the second Tuesday in November. Donald Trump won the election and the promises of tightening the relationship with the southern neighbour shocked the Latam markets and, specially, the Mexican one. The line is clear in the T-Advisor trend evolution chart:

Global Trend Evolution chart of Mexico in T-Advisor

The IPC, the Mexican benchmark, scaled a 30% in the last five years, but this positive trend changed dramatically at the beginning of the month.  If we look at the chart, the drop is clear and the change in all technical analysis references is relevant.

IPC YTD evolution in T-Advisor

Compared with other Latam stock exchanges, Mexico didn’t recover from the Trump shock:

Comparison Latam markets in T-Advisor

The question is: what is going to happen after this shock? Trump has relaxed somehow his strong comments about the relationship with Mexico, but nobody knows his real intentions when he takes office in January. Will he order the building of the wall in the Mexican border? Will he abandon the NAFTA? Will he control the Mexican immigration? All these decisions would have strong negative effects in the economy of Mexico and they would also shock the financial markets. Our bootstrapping tool reveals that there are 25% possibilities of a negative return of the IPC in the next two years. However, there are 40% probability of positive returns between 2% and 45%.

Mexico IPC bootstrapping in T-Advisor

This analysis is based on the historical evolution and considers that past performances do not guarantee future returns. In any case, these results can also be altered by sudden political decisions. Many analysts consider that 2017 will be a volatile year linked to political instability. We will soon discover how it will affect to Mexico.

What will Donald Trump bring to the markets?

It happened. Nobody expected (really) that an outsider as Donald Trump could win the election for the presidency against the candidate of the establishment, Hillary Clinton. But Trump will swear his charge as the 45th president of the USA in Washington next January. What will he bring to the markets?

The first reaction but all except negative. S&P 500 and Dow Jones went up in the following days after the election. The rise has been around 2% in this period.

S&P 500 chart in T-Advisor

S&P 500 chart in T-Advisor

Dow Jones chart in T-Advisor

Dow Jones chart in T-Advisor

Trump has campaigned for an expansive economic model. He underlined this idea in the address after the victory, because he insisted in rebuilding infrastructures. Maybe, markets have chosen to look the positive part of the Trump proposals, as NY Times comments. The positive reaction was not only in equities, but also in bonds. The position commented in Black Rock put the accent in the possible reflation if new administration confirms the Trump programme.

The effects were not so nice in other world regions. For instance, Latam received a hit and the markets (above all, Argentina and Brazil) dropped dramatically. The worst result was in the Mexican market, with a loss of 6.7% in the last 7 days. There are fears about the next decisions related to Mexico and Latam from USA, above all what refers to immigration and free trade.

Mexico IPC chart in T-Advisor

Mexico IPC chart in T-Advisor

We are not trying to predict the future. Markets usually have their own way to welcome a president. In this case, the result was positive, but it does not mean that there will be a bubble, as some say, or it will be the next crash. For sure, there will be several changes compared with the Obama Administration. Trump has also the support of the US Congress, as Republicans have the majority in both houses and this can push their economic decisions. We will comment next year to contrast the initial perceptions and the reality.

The results of the T-Advisor model portfolios in 2015

T-Advisor, as wealth management solution for individuals and professionals, has not only tools for own investments, but also proposals to follow or even copy. That’s why our system has its own model portfolios. They are nine: five related to risk profile (from aggressive to very conservative) and five related to countries (Germany, UK, Spain in Europe and Mexico and Nasdaq 100 in the Americas).

How do they work? We select between four and six ETFs for the risk-profiled portfolios and up to ten stocks for the country portfolios. The main point for us is capital preservation. That’s why our results, when they are negative, are better than the markets. To obtain them, we rebalance the portfolios every two months. These rebalances let us improve the results, as we exclude the positions more affected by market negative waves and substitute them for better stocks or ETFs. Diversification is also part of the strategy. We select the securities with the best score and relevant figures to obtain the best results.

These are the results for 2015 for our risk-profiled model portfolios:

1-year-return Volatility Sharpe ratio
Aggressive -2.53% 19.44% 0.57
Dynamic 1.47% 16.86% 0.51
Balanced 3.53% 10.03% 0.58
Conservative 1.52% 3.94% 0.90
Very conservative 0.80% 2.39% 0.18

The figures where collected on January, 13th, and they are influenced by the very bad trend in the last weeks. However, the only negative result is our Aggressive portfolio and the losses are lower if we compare them with the 1-year-returns of some of the main exchanges: S&P (-4.42%), London (-8.80%), Madrid (-9%), Hong Kong (-17.96%).

And now the results of our country portfolios:

1-year-return Volatility Sharpe ratio Index
Germany 44.70% 19.89% 6.23 2.08% (DAX)
Spain 5.74% 18.28% 1.59 -9.00% (Ibex)
Mexico 23.96% 15.03% 5.09 -1.81% (IPC)
Nasdaq 100 2.97% 18.52% 3.27 -2.44% (Nasdaq)
UK 18.32% 14.72% 2.98 -8.80% (FTSE)

Our strategies outperformed the reference indexes and even in a negative environment, all performed positively, against the negative results of the indexes.

Aren’t you tempted to clone them? We have a tool to let our users do it. Let’s try it and compare the results with your investments!

T-Advisor arrives in Mexico

Pictures from T-Advisor event in Mexico

T-Advisor, the suite of investment tools for all, arrived in Mexico. In a recent conference for Mexican professionals, our General Manager, Mr. Jaime Bolívar, explained the features and the usability of T-Advisor. He insisted in the accuracy of the data, the easiness of the use and the focus on the investors’ needs.

Mr. Bolívar also introduced the new T-Advisor 3.0 development, where social features were implemented to create an investors’ community. People interested in finances are looking for quality information and data, good tools and interesting opinions, said Mr. Bolívar. He also insisted that T-Advisor is a multichannel solution, as the access is possible through computer, tablet or mobile phone.

Another relevant subject in the event was the use of T-Advisor by professionals, as a platform to manage the client portfolio of any adviser. Our country manager and partner in Mexico, José Luis de la Plaza, pointed out that technology has opened the door to reach a client segment that was not profitable for many advisers before. T-Advisor, as a professional platform, is the solution to reach clients with a little portfolio with competitive fees. Mr. Bolívar added that T-Advisor tools are a support for advisers to provide a better service for the clients.

The event underlined the relevance of our company in Mexico, where our solutions are a reference since 2009. The country is also a reference for our company, as we already have several projects in the financial sector, where our tools and features have been implemented.

T-Advisor is a suite of online investment tools. Anyone can build his or her own portfolio, manage it, obtain full reports from the portfolio and the assets, access a large list of thousands of assets from any important market in the world and receive alerts to react to market variations. Our new 3.0. version opens the door to the exchange of opinions and investment ideas amongst the users, so that a new community can be created.

Market opportunities by T-Advisor: Grupo Mexico

T-Advisor, through its tool Market Opportunities, has detected the company Grupo Mexico, listed in the Mexican Stock Exchange as an opportunity for investment.

These are the main figures about performances and volatility in the last years:

Grupo Mexico chart in T-Advisor

The chart shows the evolution in the last year:

Grupo Mexico chart in T-Advisor

The technical analysis reveals also more data:

Grupo Mexico technical analysis in T-Advisor

Finally, the risk analysis is as follows:

Grupo Mexico risk analysis in T-Advisor

Grupo Mexico ranks amongst the most important companies in Mexico, Peru, and the US, and it is one of the major copper producers in the world. It additionally incorporates the largest multimodal rail service in México and a substantial Infrastructure Development Division with attractive growth prospects. Main Grupo Mexico activities are in the mining-metallurgic industry, the exploration, exploitation, and benefit of metallic and non-metallic ores, multimodal freight railroad service, and infrastructure development. Created 70 years ago, the company is listed on the Mexican Stock Exchange since 1978 and is one of the most traded stocks in the exchange.

Total sales decreased an 8% in 2013, till USD 9,357 million, after some years in a row with a positive development. The fall in metal prices is the major reason for the result. As a result, net profit dropped a 23% in 2013, till USD 1,845 million. However, the share is currently near the peak reached in March 2013.

Market opportunities by T-Advisor: Grupo Aeroportuario Centro Norte

T-Advisor, through its tool Market Opportunities, has detected the company Grupo Aeroportuario Centro Norte, listed in Mexico Stock Exchange as an opportunity for investment.

These are the main figures about performances and volatility in the last years:

Grupo Aeroportuario Centro Norte main figures in T-Advisor

The chart shows the evolution in the last year:

Grupo Aeroportuario chart in T-Advisor

The technical analysis reveals also more data:

Grupo Aeroportuario technical analysis in T-Advisor

Finally, the risk analysis is as follows:

Grupo Aeroportuario risk analysis in T-Advisor

The group has concessions to operate, manage and develop 13 international airports in Mexico’s north and central regions. The airports serve one of Mexico’s principal metropolitan areas (Monterrey), which is the fourth busiest airport in the country; tourist destinations (Acapulco, Mazatlán, and Zihuatanejo); regional centers (Chihuahua, Culiacán, Durango, San Luis Potosí, Tampico, Torreón, and Zacatecas); and border cities (Ciudad Juárez and Reynosa). During 2013, these airports served more than 13 million passengers. Three quarters of the group’s revenues come from aeronautical and complementary services subject to maximum tariff regulation. Group revenues in 2013 increased an 8.8%, till 3,418 million pesos. Net income jumped a 46.6%, till 1,201 million pesos.

Market opportunities by T-Advisor: Alsea

T-Advisor, through its tool Market Opportunities, has detected the company Alsea, listed in the Mexican Stock Exchange, as an opportunity for investment.

These are the main figures about performances and volatility in the last years:

Alsea main figures in T-Advisor

The technical analysis reveals also more data:

Alsea technical analysis in T-Advisor

The chart shows the evolution i the last year:

Alsea chart in T-Advisor

Finally, the risk analysis is as follows:

Alsea risk analysis in T-Advisor

Alsea is the most important restaurant franchise in Latin America. It has a broad brand portfolio in fast food, casual food and coffe shops, as Domino’s Pizza, Starbucks, Burger King, Chili’s, California Pizza Kitchen, P.F. Chang’s, Pei Wei, Italianni´s, The Cheesecake Factory, Vips and El Portón. The company has business in Mexico, Colombia, Chile and Argentina.

The group has recently bought Vips restaurant chain and is ready to settle in Brazil. The revenues increased in 2013 a 19%, till 15,7 bn Mexican Pesos. If the figure is compared with 2011, the increase is up to 50%. The net income was 663 million Mexican Pesos, a 65% more. The stock price multiplied 6 times in the last 5 years.