| | |  Business News | February 2009 
Analysts Bullish on Mexico Homebuilders
 Gabriela Lopez - Reuters
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| | State lender Infonavit plans to underwrite 500,000 mortgages, 65 percent of which will be targeted at workers who earn less than $15 a day. | |
Monterrey, Mexico - Some equity analysts are bullish on Mexican homebuilders, arguing they are likely to benefit from government policies aimed at boosting the housing sector this year despite the grim economic climate.
The Mexican government aims to increase the number of mortgages granted to 720,000 in 2009 from 717,000 last year. State lender Infonavit - the largest housing finance entity in Mexico - plans to underwrite 500,000 mortgages, 65 percent of which will be targeted at workers who earn less than $15 a day.
Homebuilders Homex (HOMEX.MX) (HXM.N), Geo (GEOB.MX), Urbi (URBI.MX) and Ara (ARA.MX), expect sales to grow approximately 10 percent this year, half the growth rate of 2008.
"The segment that will do best in 2009 will be lower cost homes. Due to the high focus of Geo and Homes on this segment, we reiterate that these companies are our favorites," said analysts at BBVA Bancomer in a report.
Homex, Geo and Urbi boosted their focus on lower-cost homes that sell for as little as the equivalent of $38,000 in mid-2008 as the global credit crunch worsened to take advantage of the government programs aimed at lower-income workers.
"We have a conservative forecast for the industry in general but we remain optimistic with regard to the large listed builders, especially Geo and Homex," said Credit Suisse in a report.
"The weakness of the shares ahead of fourth-quarter results represents a buying opportunity"
Shares in listed homebuilders plunged last year as Mexico's economic problems deepened. Since the start of the year the Mexico homebuilders index .IH has lost about 15 percent of its value.
Mexican homebuilders are slated to release their fourth-quarter results the week of February 23-27.
(Editing by Christian Wiessner) |
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