That's just fine with me. When they finely do, we'll all just be sitting here with shares bought under $8. ICA should double in a year. I could see $20's easily with any sort of Mexican infrastructure stimulus. This is a very cheap stock. A real company. It's not going anywhere. Sleep well my friends.
I does not disagree with you, you are correct. Mexico might collect less tax than other countries but it was not been taxed before, so this is a negative for investors.
Regardless, IMO, I believe this whole Mexican reform revolt is presenting an opportunity to re-balance and buy more at this levels. I am confident ICA will do great next year when public work spending money starts rolling out.
I can't emphasize enough the importance of liberalizing the oil sector. Otherwise, Mexico will run down its fields through deferred maintenance and technical incompetence and will end up like Indonesia, which got kicked out of OPEC because eventually Indonesia switched from E to I in oil, and it isn't OPIC.
I've been thinking about this and researching this for a week and I partly disagree.
Mexico's tax take (19% of GDP) is the lowest in OECD. Turkey, a country at a comparable stage of development, is at 26%. Mexico collects taxes notoriously poorly from an execution standpoint, and over-relies on the state-owned oil sector for revenue. Mexico also has a Hispano-form wealth distribution gradient (informally, "three people own everything, and everyone else is a peon").
So I'm as anti-tax as the next investor, but at the same time, I understand Mexico's interest in tax reform. Shifting away from a tax base inconsistently applied and over-reliant on petro-nationalism might be investment positive, not negative.
Anyway, Mexico has completed the first stage of reform and will soon move toward opening the oil sector to DFI. That DFI will flow in - it's certain, there will be no Mercedes-Benz denials going on in that sector. Following that second step, it will be time to address public works spending without net-borrowing the necessary sums, and that is where ICA benefits.
Had to research online, to find out. I heard this on the radio and could not remember.Also, to correct myself it was not 5 billion, but 2.
Disregarding the oil industry, Mexican reform is not good for investors, quite the opposite. Capital gains are getting taxed now. Also, higher taxes on each bracket for people. Mexico just lost huge ($5bill USD) investment from european automaker because the proposed reform. Automaker is know investing on assembly plant in Brazil, not Mexico.
Last quarter numbers showed Mexico on recession.
On the other hand, hurricane, and/or any other natural disaster could mean potential business/re-construction for ICA.
IMO this is all is driving an overall bad sentiment about Mexican economy and investors pulling out.
I see ICA as a traders' football until the Mexican Congress passes the public works bill. While of course a viable company without that bill, it's trading as an option on that bill. ETA 4Q?
The source is Global Newswire posted here on yahoo. Those dates because index funds usually balance themselves at the beginning or end of each month. Could even be in the middle (lol) I'm just not sure. But it is coming. GL