Yesterday, the full session of the Federal Economic Competition Commission (Cofece) had, as part of its order of business, the discussion and, if possible, the ruling in regard to the investigation of alleged unfair practices on discounts negotiated with suppliers against Walmart de México y Centroamérica, presided by Ignacio Caride.
In this regard, Barclays published a report warning about the regulatory risks relating to the antitrust investigation led by the Cofece, which focuses on practices that Walmex claims are common in the industry and that do not affect its capacity for growth.
In a report, analysts from Barclays considered that the decision reached through this investigation could take time in being made known, and it will be key for improving the market’s perception of this company’s stock, which has currently dropped 22.6 percent so far this year, compared to a 13.2 drop in the Mexbol IPC index.
“In our opinion, the Cofece investigation remains the biggest cause for the drop in this stock, given the current low valuation levels. In our opinion, a clarification of this event is much needed, and it could well mark a turning point in the behavior of the stock prices. Our target price is $70 pesos per share”, the bank said.
The report also draws attention to Walmex’s focus on e-commerce, where the company works in improving its digital platform and hopes to integrate a more robust app experience by 2025, with the objective of optimizing customer experience. This seeks to place Walmex in a better position against competitors like Amazon México.
Barclays also pointed out that Walmex is adapting itself to possible labor reforms in Mexico, such as the reduction of working hours from 48 to 40 and changing to a 5 day workweek. Even though these reforms could increase costs, it is considered that Walmex is better prepared than its competitors.
URBI delists from the BMV
URBI, a housing developer, one of the most emblematic companies in the Mexican real estate sector, informed that the National Banking and Securities Commission (CNBV) authorized the cancellation of the subscription of all of its shares in the National Securities Registry (RNV). This movement marks a turning point in the company’s history.
The cancellation of its subscription means that URBI, headed by Alfonso Zatarain Rubio, will no longer be subject to the transparency and reporting obligations demanded by the stock market, as entailed by its withdrawal from the Mexican Stock Exchange (BMV).
URBI, which at one time was one of the main housing developers in Mexico, has faced years of financial difficulties. The company declared commercial insolvency in 2014 after accumulating unsustainable debt deriving from the crisis in the real estate sector and public policies that affected the demand for low-income housing. Even though it was able to restructure its debt and emerge from commercial insolvency in 2016, its recovery has been slow and fraught with challenges.
The cancellation of its registration is an effort by the company to reduce administrative and operative costs; this decision, however, also reflects a wider phenomenon in the Mexican Market; companies leaving the BMV. This week, for example, Elektra announced that it will propose its delisting from the stock market this coming December 27. This poses a challenge for the development of the stock market, which is still small in comparison to that of other emerging economies.
The lawyer of the Year is Mexican
The announcement of the high tariffs that Donald Trump, president-elect of the United States, intends to impose on Mexico points toward the extension of labor and union issues in our country under the USMCA scheme and the Rapid Response Labor Mechanisms.
This scenario will require skill and expertise from firms specializing in labor litigation in order to keep global investments and companies afloat, mainly in the case of the automotive, manufacturing and maquila sectors.
Along these lines, we want to tell you that Lexology’s Labour & Employment, in Who’s Who Legal Awards in London, recognized Óscar de la Vega, of the De la Vega & Martínez Rojas Law Firm, as Lawyer of the Year 2024. Congratulations!
