Citigroup Inc (NYSE: C) raised Mexican stocks to “overweight” from “neutral” citing attractive valuations in the country, an economic recovery, and expectations that interest rate increases will be delayed until September.
The research note from Citigroup strategists geoferry Dennis and Jason Press also cut the company’s rating on Chilean stocks. Citigroup also cut shares to in Chile to “underweight” from “overweight” after outperforming the region during the last four months. Chile’s Ipsa stock index is up by 4% this year and Mexico’s Bolsa index is down by 4.8% for the year.
Press wrote, “The U.S. economy should continue to recover during 2010, supporting Mexican growth.”
Citigroup’s top Mexican stock picks include America Movil SAB, Mexico’s largest wireless carrier, Organizacion Soriana SAB, Mexico’s second-largest grocery retailer, Coca-Cola Femsa SAB, the largest soft-drink company in Mexico and Grupo Mexico SAB, the country’s largest mining company.
Other topic picks in Mexico for Citigroup included Corporacion Geo SAB, Mexico’s second-largest homebuilder, Alfa SAB, the world’s largest producer of aluminum engine heads, and Banco Compartamos SA, a financial institution that lends to low-income families.
