Bloomberg News

Homex Advances Most in Five Weeks on 2012 Sales Forecast

December 06, 2011

(Updates prices in second paragraph.)

Dec. 6 (Bloomberg) -- Desarrolladora Homex SAB, Mexico’s largest homebuilder, posted its biggest gain in five weeks as optimism mounted that the company’s business will improve after it published 2012 forecasts.

Shares jumped 7.8 percent to 29.17 pesos at the close of trading in Mexico City, the biggest gain since Oct. 27. The benchmark IPC index fell 0.1 percent today.

Homex expects 2012 sales to rise 37 percent to 39 percent, including contracts with the federal government to build prisons, the company said after the close of trading yesterday. The projected pickup is buoying investor confidence after homebuilders were the biggest losers on the IPC this year, said Jorge Lagunas, who oversees about $200 million as a money manager at Mexico City-based Grupo Financiero Interacciones and said he bought Homex shares today.

“Homex is a good a company that has aggressive growth plans for the coming year, and the market is now realizing it,” Lagunas said.

Mexican homebuilders closed at their lowest levels in two years on Nov. 25 on concern delays in government subsidies were leading to inventory backlogs and cash shortages.

The Habita index of six Mexican homebuilders has dropped 57 percent in 2011.

Corp. GEO SAB, Mexico’s second-largest homebuilder, has led declines on the country’s benchmark gauge, losing 63 percent this year. Homex lost 58 percent this year, making it the second worst performer on the IPC.

Homex said in an Oct. 24 statement that delays in one subsidy program, known as the 2x1 program, “particularly” affected operations in the third quarter. Under the 2x1 program, aimed at helping low-income families purchase homes, the federal government will provide one peso of subsidy money for every two pesos pledged by local governments.

--Editors: Richard Richtmyer, Marie-France Han

To contact the reporter on this story: Jonathan J. Levin in Mexico City at jlevin20@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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