Mexico's Stock Market Breakthrough in 2025: Why Investors Are Starting to Follow This Overlooked Market

Interesting data has emerged: this year, the Mexican stock market S&P/BMV IPC has risen by 21.7%, while the major U.S. stock indices have essentially remained flat or even fallen. This is quite counterintuitive in the context of Trump being re-elected and imposing a 25% tariff on Mexican goods.

Current Status of the Mexican Stock Market: A Concentrated Game of 145 Listed Companies

Mexico has only 145 listed companies (of which 140 are local enterprises), which is relatively small compared to its economic size. However, despite the small number, the concentration is astonishingly high— the top 35 companies account for 80% of the market value, and the top 10 companies control nearly 70% of the index weight.

What does this mean? By tracking a few leaders, one can grasp the pulse of the entire market.

The Five Giants Support Half the Sky

Walmart Mexico (WALMEX)

• Market Cap: 11 billion Mexican Pesos
• Dividend Yield: 3.83%
• Q2 sales reached 24.63 billion pesos, a year-on-year increase of 10.3%, but net profit actually declined (112.27 billion vs 125.1 billion)
• Wall Street Attitude: Overweight Positions

América Móvil (AMX)

• Market Cap: $70.75 billion
• The world's second-largest telecom operator, with over 320 million users in 23 countries.
• Q3 revenue 23.29 billion pesos, a year-on-year increase of 4.2%, net profit 22.7 billion pesos
• Analysts are unanimously bullish, with a target price of 21,323 pesos.

Grupo México (GMEXICO)

• Market Cap: 12.7 billion Mexican Pesos (largest single entity)
• The world's third largest copper mine producer
• Q3 revenue surged by 11% to $4.59 billion, with net profit soaring over 50% to $1.29 billion.
• Analysts are bearish, with a target price having a downside potential of 6.9%.

FEMSA

• Market Value: 58.33 billion pesos
• The world's largest Coca-Cola bottler, present in 17 countries.
• Q3 revenue increased by 9.1%, but net profit plummeted by 36.8% (exchange loss + soaring financial costs)
• Dividend Yield: 7.4% (very strong)

Banorte Bank

• Market Cap: 53.47 billion PHP
• Mexico's second largest bank, 22 million customers
• Q3 net profit 13.08 billion pesos, a year-on-year fall of 9%
• Dividend yield: 7.3%, Overweight rating by Wall Street

Why did the Mexican stock market soar during the Trump era?

1. Onshore Outsourcing Wave: American companies are fleeing China and turning to Mexico, with a continuous influx of production capacity investment.
2. Strong Consumer Resilience: Robust domestic demand has offset trade pressures.
3. Currency Stability: The peso has shown resilience under trade tensions, and the pressure on businesses for currency exchange has relatively eased.
4. Central Bank Cuts Interest Rates: Inflation drops to 3.5%, the Bank of Mexico begins an easing cycle, and funding costs decline.

Core Metrics Overview

S&P/BMV IPC Indicator Data

• Past 1 year rise: 29%
• Annualized over the past 5 years: 15%
• Annualized over the past 10 years: 6.44%
• Current price level: 63,000-64,000
• Top 10 weight: 71.6%
• Industry share: Consumer goods 30.9% > Raw materials 26.2% > Industrial 12.3%

How should investors view it

For investors with overly concentrated positions in U.S. stocks, 2025 is indeed a turning point. Although the Mexican stock market has only 1/15 the size of the leading U.S. stocks, it tends to perform better during specific cycles.

A possible configuration idea:

• 40% US blue chip stocks (holding existing positions)
• 30% Mexico Leader (Telecom + Retail + Banking + Consumer Goods Diversification)
• 20% Local Bonds (High Yield Arbitrage)
• 10% cash (risk buffer)

Risk Warning: The liquidity in the Mexican market is far less than that of US stocks, with high concentration in individual stocks, where negative news about a single company could impact the index. The fluctuations in US trade policy are also a long-term variable.