Citi Upgrades Mexbol Forecasts, Sees 6% Potential Upside

Bloomberg has reported that Citi now expects Mexico’s benchmark index to gain around 6% this year from present, and said the country’s stocks could benefit from concerns about the new administration in Brazil.

• Citi’s Mexbol mid-year target has been raised to 53,000 points, where the index is currently trading, up from 51,000. The year-end target was raised to 56,000 from 52,500.
• Playing nearshoring narrative on index may work out better than stock picking.
• Mexico likely to be hit by a mild recession, though in a soft-landing scenario the Mexbol could reach 63,000.
• Concerns about Brazilian President Luiz Inacio Lula da Silva’s third term are “likely to benefit Mexico over the medium term”.