Weak Earnings Are Failing to Deter Mexico Investors Nacha Cattan - Bloomberg
go to original November 9, 2015

Mexico’s worst earnings in 13 quarters aren’t deterring investors betting that rising sales are a precursor to economic growth next year.

The IPC Index has climbed 6.2 percent in the last month, the second-best performance among the benchmark gauges in six Latin American markets. That’s because shareholders are focusing on the bigger picture: a resurgence in the domestic economy, Grupo Financiero Santander Mexico SAB and Bank of America Corp. say.

Average sales for Mexico’s companies currently on the IPC rose to the second-highest level since 2012 in the third quarter, according to data compiled by Bloomberg. Mexican consumers are spending more as wages rise and inflation drops to record lows because of new laws that reduced phone and TV service prices.

“The most dynamic part of the economy is domestic consumption,” said Arturo Espinosa, a Mexico City-based strategist for Santander. “The latest results from the companies show the Mexican economy is recovering more quickly than expected.”

...Retail sales jumped by the most since 2012 in June, according to government data.

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