Energy reform prompts profit-taking in Mexico petrochemical firms
MEXICO CITY Aug 12 (Reuters) - Shares in Mexico's petrochemical companies, widely seen as key beneficiaries of a comprehensive energy reform unveiled by Mexican President Enrique Pena Nieto, fell on Monday as profit-taking led investors to cash out recent gains.
Shares in conglomerate Alfa fell more than 4 percent, while Alpek, Alfa's main petrochemical subsidiary, also saw its share price tumble about 4 percent. Mexichem stock was nearly 3 percent lower.
Pena Nieto unveiled the government's proposal to reboot Mexico's ailing oil, gas and electricity sectors on Monday in a reform that aims to boost private sector involvement in the country's ring-fenced energy monopolies.
That is expected to help Mexico's major petrochemical firms that could gain access to a shuttered market, benefit from cheaper inputs such as natural gas and electricity and eventually produce new products.
Many of those companies have rallied in recent weeks as investors banked on the energy reform. Shares in Alpek, for example, had risen slightly less than 25 percent since mid-June, while Mexichem stock had risen more than 20 percent.
But analysts attributed the sell-off to profit-taking as investors sought to cash out those recent gains, adding they expected the shares to start heating up again once the so-called secondary laws, which would offer more details on the reform, come out later this year.
"To put it simply, you buy on the rumor and sell on the news," said Fernando Bolanos, a petrochemical analyst at Monex financial services group in Mexico City. "We don't think that the announcement has left any of these companies out and if it's approved (by Congress), they'll benefit."
The immediate winner of the reform appeared to be Grupo Mexico.
Shares of the miner and infrastructure company rose nearly 4 percent, boosted by a combination of improving copper prices and expectations the company's infrastructure and transport arms could see higher revenues on the opening up of Mexico's energy sector, Bolanos said.
Copper prices finished last week up 3.8 percent, their biggest weekly gain since September 2012, helped by Chinese trade data that showed stronger commodities imports.