Quiet time in holy month: market consolidation expected as Bolsa gets down to post-holiday business.Holy Week provided market players a well-deserved break from the relentless advance that has dominated the last 12 months. Finally, we could take a breather Verb 1. take a breather - take a short break from one's activities in order to relax catch one's breath, rest, breathe intermit, pause, break - cease an action temporarily; "We pause for station identification"; "let's break for lunch" from a year that has truly surpassed expectations and a rally that refuses to quit. Just to refresh (1) To continuously charge a device that cannot hold its content. CRTs must be refreshed, because the phosphors hold their glow for only a few milliseconds. Dynamic RAM chips require refreshing to maintain their charged bit patterns. See vertical scan frequency and redraw. our memories, a year ago, Iraq was surrendering to the U.S.-led coalition, which signaled the beginning of 12 months of unchecked gains in U.S. and local markets. Back then, the IPC (1) (InterProcess Communication) The exchange of data between one program and another either within the same computer or over a network. It implies a protocol that guarantees a response to a request. was trading at levels above the 6,000 mark. In recent weeks, it has been inching closer and closer to 11,000 with estimates for the year-end now well above 11,500. In May 2003, benchmark telecoms Telmex and America Movil's shares were worth 15 and 8 pesos, respectively. In May 2004, they have been fetching fetch·ing adj. Very attractive; charming: a fetching new hairstyle. fetch  ing·ly adv. 21 and 22 pesos with no obvious sign of retreat. Other
companies have followed these heavyweights upward, and the majority of
second-tier stocks second-tier stockSee secondary stock. have either posted new or three to four year highs. Looking back to last month's column, I suggested that the Bolsa would stay above 10,000 points and then move higher, short of any disasters. However, following the Madrid bombings, the Bolsa spent a week below 10,000. And despite the increase of violence in Iraq and the Middle East and the 9-11 inquiry still dominating headlines, stocks have proved resilient See resiliency. to these external forces, shrugging off negativity in favor of upon the side of; favorable to; for the advantage of. See also: favor home-based economic data. HEAVY FLOW IS HEALTHY Despite the Madrid-related sell-off, the IPC index never dropped below its technical support level at 9,850, which was a significant factor in its subsequent rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective . The size of the bounce 1. bounce - (Perhaps by analogy to a bouncing check) An electronic mail message that is undeliverable and returns an error notification (a "bounce message") to the sender is said to "bounce". 2. bounce - To play volleyball. The now-demolished D. C. , however, has been surprising, and there was a storming 10-day rally in the run-up to Holy Week with daily volumes over 50 million shares during the three trading days In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. during Semana Santa. A year ago, the Bolsa was struggling to register these volumes on a good day. As mentioned, it is the performance of the economy that is continuing to fuel this rally. Recent batches of economic data all point to an accelerating recovery, especially in areas that have suffered the most, such as manufacturing. In March, vehicle exports, Mexico's second-most profitable export after oil, showed the first year-on-year increase in 18 months, with vehicle production posting positive figures for the first time in 22 months. Meanwhile, industrial production as a whole in February managed a 2.2% YOY YOY Year Over Year YOY Year On Year YOY Young of the Year YOY Yield on Year gain--with construction and mining (see related story, page 20) streaking ahead. INDUSTRIAL DYNAMOS Dynamos may mean:
Most notable, however, was the 1.2% rise in manufacturing output. While industrial stocks have been among the biggest gainers in the last couple of months, the data is backing up investors' decisions with hard numbers. The result is continued strength. A look at some of the industrialists' performances from March 11 to April 11 will confirm that the road to recovery already looks paved pave tr.v. paved, pav·ing, paves 1. To cover with a pavement. 2. To cover uniformly, as if with pavement. 3. To be or compose the pavement of. . Cemex, for example, has seen its price gain 11.7%, while Alfa has gained 12.8%, miner Penoles 38.9% and steelmaker Hylsamex 42.6%. The strong surge has received further support on a more individual basis too, with many companies offering far-improved dividends compared to last year's payouts. The most notable was Televisa, which offered shareholders a one-off payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. of 1.12 pesos per share in the course of adjusting its share structure to clear up an outstanding agreement with other investors, including Carlos Slim. The move was greeted with a 14.3% gain in just four days. Looking forward, the market is keeping a close eye on the U.S. Federal Reserve, as expectations of a rate rise are beginning to snowball snowball: see honeysuckle. . The evidence has been marked by a recent bond rally which, combined with the market topping out, may lead to a short-term shift into more defensive positions, with bonds the obvious choice. While the peso has recently taken a tumble toward its all-time low against the U.S. dollar, we may see impending im·pend intr.v. im·pend·ed, im·pend·ing, im·pends 1. To be about to occur: Her retirement is impending. 2. first-quarter results disappoint dis·ap·point v. dis·ap·point·ed, dis·ap·point·ing, dis·ap·points v.tr. 1. To fail to satisfy the hope, desire, or expectation of. 2. on the bottom line, leading the stock market to take its own breather with a bout of consolidation. [GRAPHIC OMITTED] Gianluca Baratti works as a stock market analyst at Finamex Casa de Bolsa. [ILLUSTRATION OMITTED] Commentary by Gianluca Baratti
Index 31 March NOMINAL REAL (1)
Monthly Accrued Monthly Accrued
Stock Market INDEX
IPC 10,517.50 5.3% 19.6% 4.9% 17.7%
INMEX 595.31 5.3% 21.3% 5.0% 19.5%
Mutual Funds
Equity 3,051.63 3.4% 14.5% 3.1% 12.7%
Debt for Individuals 4,170.02 0.5% 1.2% 0.2% -0.4%
Debt for Corporations 1,632.30 0.5% 1.3% 0.2% -0.3%
Economic Activity
Industrial 4,189.67 5.7% 23.8% 5.3% 21.9%
Retail 13,903.77 3.3% 20.7% 3.0% 18.8%
Non-Financial Services 7,078.79 4.4% 11.3% 4.1% 9.6%
Insurance and Banks 4,361.52 2.8% 5.2% 2.4% 3.6%
Broker Firms 414.03 0.0% 0.0% -0.3% -1.5%
Financial Groups 396.49 7.4% 18.5% 7.0% 16.7%
Sector
Mining 13,669.94 6.4% 31.6% 6.0% 29.5%
Industrials 3,466.99 4.4% 17.6% 4.1% 15.8%
Construction 17,361.02 3.8% 18.6% 3.5% 16.8%
Retail 17,238.07 3.0% 12.5% 2.6% 10.8%
Communications & 44,611.60 7.2% 21.5% 6.8% 19.6%
Transportation
Services 1,366.84 9.3% 23.9% 8.9% 22.0%
Holding Companies 3,653.17 0.1% 14.2% -0.2% 12.5%
Index DOLLARS (2)
Monthly Accrued
Stock Market
IPC 4.7% 20.5%
INMEX 4.7% 22.2%
Mutual Funds
Equity 2.9% 15.3%
Debt for Individuals -0.1% 1.9%
Debt for Corporations 0.0% 2.0%
Economic Activity
Industrial 5.1% 24.7%
Retail 2.8% 21.6%
Non-Financial Services 3.8% 12.2%
Insurance and Banks 2.2% 6.0%
Broker Firms -0.6% 0.7%
Financial Groups 6.8% 19.4%
Sector
Mining 5.8% 32.5%
Industrials 3.9% 18.5%
Construction 3.3% 19.5%
Retail 2.4% 13.3%
Communications & 6.6% 22.4%
Transportation
Services 8.7% 24.8%
Holding Companies -0.4% 15.1%
(1) March inflation: 0.34% January-March inflation: 1.57%
(2) March depreciation: 0.5% January-March depreciation: -0.7%
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