The measure decided by the current President of the United States of America to continue building a wall that separates its border from that of Mexico it can have consequences beyond the merely social or economic. Because in fact, although you may not know it, it can affect you from now on in your relationships with the world of money. And more specifically with equity markets. More than you can imagine from the beginning.
This controversial measure, if carried out in the end, could be a serious setback for the coffers of the Mexican government. With an important discount on your Gross Domestic Product (GDP). It is true that the main victims will be the Mexican citizens themselves. To the point that you can begin to notice it in your household finances. Without ruling out that the Central American country could enter a recessive process. Especially if the price of oil does not rebound in the coming months. You cannot forget the great link between the Mexican economy and black gold. More than in other nations, including the United States itself.
But there is a side effect that will affect yourself. As a small and medium investor that you are and a consumer of financial products. Very specifically, in what has to do very directly with your investments in the stock market. The reason is very simple, since the great exposure of Spanish companies to this geographic area is more than important. Any variation in international relations in the Aztec country can affect them. And as a consequence of them, losing money in the equity markets.
Spanish companies in Mexico
The presence of the business fabric in this geographical area is more than relevant. It affects practically all the sectors that are present in the national stock market. With a very important role in the banking sector. Mainly represented by its two large financial groups: BBVA and Santander. The first of them has already announced that it may be harmed in its interests if there is a break between Mexico's relations with the United States. To the point that its price may depreciate over the next few months.
In this sense, it is the banks that would have to fear the most due to this fact in the international relations of the two American countries. With a strong stop in the upward trend that could develop from now on. From this scenario, there is no doubt that it may be one of the most disadvantaged segments of the business. It is convenient that you take it into account for when it comes time to build your portfolio of securities during this year.
Interests of national companies
It is not only banks that are exposed to this country. But others of special relevance and with a great specific weight in the selective index of Spanish equities. Because indeed, the presence in Mexico is more than relevant. As a consequence of this elaborate business strategy, price cuts of their prices if this measure of the North American president affects the Mexican economy. It will be something that will have to be verified in the coming months. You will have no choice but to be very attentive to everything that happens in case it is necessary that you have to change your investments at some point this year.
Because in fact, Spanish investment is the second most important in the country, only behind that of the United States, as it has large investments by companies listed on the equity market. For example, Telefónica, OHL, ACS, Iberdrola, Gas Natural, Repsol, Acciona, Mapfre, Inditex and an increasing number of firms that have decided in recent years to take positions in that Latino economy.
Strong national presence
Listed companies have a lot to lose if the evolution of the Mexican economy is not as expected, nor is it necessary. According to the latest foreign trade reports, it currently has in Mexico today with more than 4.000 companies of all sizes and present in most economic and commercial areas. The financial sector is currently the one with the greatest presence in these lands.
But it is not unique, far from it. Not surprisingly, there is a great concentration of interests in other vitally important ones, such as insurance, construction, telecommunications, energy, the manufacturing industry, or even real estate. Also in recent years, the entry of many Mexican companies in Spain. Although under lower levels, for which they have chosen to increase their presence in the country or disembark strongly in the Central American market. One of the last examples is the one that refers to the Mapfre insurance company. With its recent announcement about its commitment to this emerging economy and through a powerful investment in this international destination.
While on the other hand, the report: «Mexico and Spain in the global mirror », carried out by the consulting firm PriceWaterHouseCooper and the Mexican Council of Businessmen (CMHN), show that the presence of Spanish companies operating in Mexico exceeds the figure indicated above. With returns in operations that are presented in some of the cases under double-digit growth. As a point of reference in the bilateral relations between the two Hispanic nations.
What can happen in the bag?
All these events, without a doubt, can weigh down the evolution of the Spanish stock market in the coming months. Much more than you can imagine from a price. To the extent that financial markets can discount the loss of competitiveness of the Aztec economy from their price. Although without being able to quantify under what intensity these movements will be generated. Although there is no shortage of voices from some equity experts who are already talking about more than 5% of the current price.
From this international scenario that can arise, there are several investment strategies that you can take from now on. One of them necessarily goes through undervaluing the national stock market. Opting for other companies or sectors that do not have interests in this area of great importance to national interests. You can also go reducing positions progressively in most of these companies. Either in an orderly fashion or through much more aggressive performances.
In all cases, one of your main objectives will be to protect your interests as a retail investor above other considerations. Even coming out of our bag If this is your wish for real Towards other international financial markets less exposed to this country. To the extent that they can count on a potential for revaluation at this time much more powerful than ours. Precisely because of the measures promoted by the new tenant of the White House.
Tips for acting in the markets
A series of performance guidelines will never hurt you in case this scenario actually occurs. There is no better way to make your savings profitable than by anticipating the new scenario that may emerge as a result of the bilateral relations between the United States and Mexico. Below we offer you some of the tips that you can import from these precise moments. Among which the following stand out.
- We will have to act with maximum prudence with regard to national securities with a strong presence in the Mexican markets. And above all, how the measure can affect their business accounts. Over the next few months there will be more than one clue in this regard.
- They are precisely the financial and tourism sectors the most sensitive to this commercial relationship, above other business segments of special relevance. Therefore, you will have no choice but to be attentive to the listing of these companies on the Spanish stock market.
- In spite of everything, do not doubt that they will also arise new investment opportunities in national equities. Headed by values that can benefit from the implementation of a wall between the two powers of the American continent.
- Either way, if the Uptrend remains in the main stock market indices, it will be very difficult for the affected securities to develop significant and prolonged falls in financial markets. In the worst case, they will have a less favorable behavior than in the other proposals offered by equities.
- One of the effects of this scenario is that it can harm the evolution of the benchmark index of the Spanish stock market, the Ibex 35, with respect to other benchmarks on the European continent. Where a good part of the capital flows from European investors can go.
- The scenario where this international incidence can have the greatest influence is in the banking system. Not surprisingly, you can join the decrease in their intermediation margins and that has lowered expectations for the entire sector.
- Finally, you cannot forget that this event may be merely temporary. And that at the end of the day does not affect the share price. Or at least with a really minimal duration, which is limited to just a couple of sessions in equities. That is at least the desire that some small and medium investors harbor.