Peñoles, Grupo México: Leaders in the Mexican Stock Exchange
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Peñoles, Grupo México: Leaders in the Mexican Stock Exchange

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Paloma Duran By Paloma Duran | Journalist and Industry Analyst - Mon, 01/11/2021 - 18:03

Industrias Peñoles and Grupo México, both Mexican companies, have reported the highest stock prices in the Mexican Stock Exchange (BMV) in 2020. Furthermore, these companies are expected to continue increasing their value due to the rise in metal prices.

In December, the stock yield of Industrias Peñoles and Grupo Mexico rose by 72.98 percent and 58.62 percent, respectively. This increase is due to the economic uncertainty that led investors to acquire more precious metals, especially gold, as a hedge against possible inflation caused by the unprecedented money printing, reported MBN.

In August, with COVID-19 cases still on the rise worldwide and no vaccination in sight, gold prices reached more than US$2,050/oz. Additionally, silver prices rose by 44.86 percent to US$25.8298/oz overall this year. Meanwhile, in December, copper hit US$8,028 per metric ton – its highest level since 2013 – due to an increase in production levels, reported MBN.

El Economista reported that in 2020, international mining companies that participated in the stock market generated US$122,605 in profits. Moreover, miners in the US, UK, Brazil, Canada and Mexico benefited the most from the increase in value for precious metals.

Fresnillo, a subsidiary of Industrias Peñoles, which is listed on the London Stock Exchange reported a 76.43 percent increase in its stock price in 2020. Furthermore, Peñoles had the fourth-largest profit with an increase of 69.91 percent on the Mexican Stock Exchange (BMV).

Fresnillo CEO Octavio Alvídrez told MBN that “the combination of higher commodity prices and lower costs resulted in a significant rise in profitability.” Alvídrez explained that the company’s profits increased 5.3 percent to US$1.125 million in 1H20, mainly due to higher gold and silver prices and, to a lesser extent, higher volumes of zinc and lead sold.

During the first weeks of 2021, the stocks of Peñoles and Grupo Mexico increased 5.46 percent and 13.5 percent respectively, which allowed both companies to be at the top of the list of BMV’s Prices and Quotations Index (IPC), reported El CEO.

Eugenio Gallegos, Financial Analyst, told El CEO that if the dollar remains weak, silver, copper and gold will continue to be profitable. Gallegos explained that the stocks of Peñoles and Grupo México are among the strongest and most stable on the BMV, which make them the favorite companies in the mining industry.

Positive news of a COVID-19 vaccine had dented precious metal prices. However, several events such as Trump’s initial refusal to sign a stimulus bill and news from a more contagious COVID-19 variant, have increased precious metals prices, reported MBN.

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