Walmex Stock Downgraded

UBS Pactual is recommending investors sell equity holdings of Mexican retailer Walmex, which the shop claims is now more exposed to bear market fundamentals. With same store sales expected to hit their lowest point in a decade in the four weeks in September, revenues are likely to suffer, with Ebitda in the second half being hit additionally by operating leverage and factors such as cost competition that reduce marginal sales. The shop maintains the risks are largely macroeconomic, which means other consumer businesses in Mexico should also suffer.