Senior Credit Analyst - Emerging Markets, EM Spreads

Leandro Gubler

Senior Credit Analyst - Emerging Markets

EM Spreads

Credit

<ul>
<li>The LatAm Corporate Index tightened by 3 basis points (bps) to 319 bps in the week ending on Friday, January 24, 2025.</li>
<li>U.S. Treasuries saw modest increases, with the 10-year yield up 2 bps to 4.64% and the 5-year yield also up 2 bps to 4.45%.</li>
<li>Cemex – Mexico Construction Key Indicators, YPF/Vista - Shale Boom Drives Argentina’s Energy Trade Surplus.</li>
</ul>


The LatAm Corporate Index tightened by 3 basis points (bps) to 319 bps in the week ending on Friday, January 24, 2025.
U.S. Treasuries saw modest increases, with the 10-year yield up 2 bps to 4.64% and the 5-year yield also up 2 bps to 4.45%.
Cemex – Mexico Construction Key Indicators, YPF/Vista - Shale Boom Drives Argentina’s Energy Trade Surplus.


<ul>
<li>We downgraded Cemex to Market Perform and do not anticipate that the notes will outperform in the near term.</li>
<li>We continue to view Cemex as an attractive emerging market credit story supported by favorable market conditions, credit-positive strategic priorities, and a commitment to strengthening its credit profile.</li>
<li>We believe the risk/reward profile is skewed to the downside. This view is based on current spread levels, weak earnings results, and elevated near-term political and headline risks.</li>
</ul>


We downgraded Cemex to Market Perform and do not anticipate that the notes will outperform in the near term.
We continue to view Cemex as an attractive emerging market credit story supported by favorable market conditions, credit-positive strategic priorities, and a commitment to strengthening its credit profile.
We believe the risk/reward profile is skewed to the downside. This view is based on current spread levels, weak earnings results, and elevated near-term political and headline risks.


Cemex 3Q24: Long-Term Outlook Clouded by Near-Term Risks

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>With the MSCI ACWI (ACWI-US) approaching the top-end of our expected 2023 trading range at $93, we see limited upside from here, and we believe caution is warranted.</li>
<li>We want to remain overweight Europe and the UK, but we prefer to buy only on pullbacks.</li>
<li>The Hang Seng and MSCI China (MCHI-US) are both getting rejected at their important resistances discussed last week, and we would expect to see a basing process develop below resistance.</li>
</ul>


With the MSCI ACWI (ACWI-US) approaching the top-end of our expected 2023 trading range at $93, we see limited upside from here, and we believe caution is warranted.
We want to remain overweight Europe and the UK, but we prefer to buy only on pullbacks.
The Hang Seng and MSCI China (MCHI-US) are both getting rejected at their important resistances discussed last week, and we would expect to see a basing process develop below resistance.


Caution Warranted; ACWI-US At $93 Resistance; Buys in Communications, Staples, Materials, Financials

Covering the Mexican Economy, Actinver Research

Actinver

Covering the Mexican Economy

Actinver Research

Actinver is a mexican leading financial group, that generates well being for individuals and companies through advisory services that provides investment management to maintain and grow their wealth.

Equity Bottom-Up

<ul><li>Although the environment was challenging, with bad weather conditions and volume contraction, the Cement Industry's quarterly results came in line with our estimates.</li><li>Higher costs were partially compensated by the companies' efficiencies; however, this was not enough to compensate for the sector's margin contraction.</li><li> Total revenues in 3Q24 decreased 6% YoY, while total EBITDA dropped 11% YoY, practically in line with our expectations.</li></ul>

Although the environment was challenging, with bad weather conditions and volume contraction, the Cement Industry's quarterly results came in line with our estimates.Higher costs were partially compensated by the companies' efficiencies; however, this was not enough to compensate for the sector's margin contraction. Total revenues in 3Q24 decreased 6% YoY, while total EBITDA dropped 11% YoY, practically in line with our expectations.

GCC SAB de CV - Actinver Research - Cement post 3Q24: Bad Weather Negatively Impacted Results

Macroeconomics

<ul>
<li>Total revenues decreased by 6% to US$4.1 Bn, while EBITDA dropped 13% (or -9% on a like-to-like basis) to US$746 M, below the consensus estimate of US$813 M, and slightly below our US$765 M estimate.</li>
<li>On the other hand, the net profit of US$406 M compares positively vs. the US$126 M in 3Q23.</li>
<li>The higher net income was driven primarily by a lower effective tax rate and the gain from the sale of CEMEX's operations in Guatemala.</li>
</ul>


Total revenues decreased by 6% to US$4.1 Bn, while EBITDA dropped 13% (or -9% on a like-to-like basis) to US$746 M, below the consensus estimate of US$813 M, and slightly below our US$765 M estimate.
On the other hand, the net profit of US$406 M compares positively vs. the US$126 M in 3Q23.
The higher net income was driven primarily by a lower effective tax rate and the gain from the sale of CEMEX's operations in Guatemala.


Actinver Research - CEMEX 3Q24: Bad Weather Negatively Impacted Results (Quick View)

Mexico

Cemex SAB de CV is a building products company. The Company produces, distributes, and markets cement, ready-mix concrete, aggregates, and related building materials. Cemex operates throughout the Americas, Europe, Africa, the Middle East, and Asia.

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Cemex SAB de CV (CEMEXCPO MM)

EM Spreads – Weekly News & Views

LatAm Corporate Index tightens, U.S. Treasuries see modest increases, Cemex and YPF/Vista drive Mexico and Argentina's economic indicators.

Leandro Gubler

Cemex 3Q24: Long-Term Outlook Clouded by Near-Term Risks

Cemex downgraded to Market Perform due to downside risk and weak earnings results, but still seen as an attractive emerging market credit story.

Leandro Gubler

Caution Warranted; ACWI-US At $93 Resistance; Buys in Communications, Staples, Materials, Financials

With the MSCI $ACWI approaching the top-end of our expected 2023 trading range at $93, we see limited upside from here and believe caution is...

Vermilion Research

GCC SAB de CV - Actinver Research - Cement post 3Q24: Bad Weather Negatively Impacted Results

Although the environment was challenging, with bad weather conditions and volume contraction, the Cement Industry's quarterly results came in line...

Actinver

Actinver Research - CEMEX 3Q24: Bad Weather Negatively Impacted Results (Quick View)

Total revenues decreased by 6% to US$4.1 Bn, while EBITDA dropped 13% (or -9% on a like-to-like basis) to US$746 M, below the consensus estimate of...

Actinver

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

EM Spreads – Weekly News & Views

​LatAm Corporate Index tightens, U.S. Treasuries see modest increases, Cemex and YPF/Vista drive Mexico and Argentina's economic indicators.

Leandro Gubler

Cemex 3Q24: Long-Term Outlook Clouded by Near-Term Risks

​Cemex downgraded to Market Perform due to downside risk and weak earnings results, but still seen as an attractive emerging market credit story.

Leandro Gubler

Caution Warranted; ACWI-US At $93 Resistance; Buys in Communications, Staples, Materials, Financials

With the MSCI $ACWI approaching the top-end of our expected 2023 trading range at $93, we see limited upside from here and believe caution is...

Vermilion Research

GCC SAB de CV - Actinver Research - Cement post 3Q24: Bad Weather Negatively Impacted Results

Although the environment was challenging, with bad weather conditions and volume contraction, the Cement Industry's quarterly results came in line...

Actinver

Actinver Research - CEMEX 3Q24: Bad Weather Negatively Impacted Results (Quick View)

Total revenues decreased by 6% to US$4.1 Bn, while EBITDA dropped 13% (or -9% on a like-to-like basis) to US$746 M, below the consensus estimate of...

Actinver

LatAm Corporate Index tightens, U.S. Treasuries see modest increases, Cemex and YPF/Vista drive Mexico and Argentina's economic indicators.

Cemex downgraded to Market Perform due to downside risk and weak earnings results, but still seen as an attractive emerging market credit story.