SHARE INDEX: Mexican rave

Investors show confidence in Latin American drinks companies.
This month’s biggest news comes from Mexico, where beer brewer Grupo Modelo SA de CV has seen its share price rise by nearly 30%. The group’s principal brands include Corona Extra, Modelo Especial, Victoria, Pacifico, Negra Modelo, Anheuser-Busch, Budweiser and Bud Light.

Meanwhile, Coca Cola Femsa, the largest beverage company in Latin America, has taken the lead in the soft drinks sector. The company’s share price increased by 25.75% following Femsa’s acquisition of 8% of Coca-Cola Femsa’s total outstanding stock from The Coca-Cola Company.

Sapporo Holdings’ decision to strengthen its poison-pill defences (see opposite) boosted investor confidence leading to a 23.55% increase in the brewer’s share price.

Diageo also saw its share price boosted by its acquisition of a 43% stake in Chinese spirits group Sichuan Chengdu Quanxing. The spirits giant is waiting for government approval to set up a distribution and packaging JV with the Chinese company.

At the other end of the scale, Pernod Ricard saw its share price drop as it denied that its talks with Soyuzplodimport over Stolichnaya vodka are nearly over.

This month’s graph reflects investors’ positive outlook on Latin America with the MSCI Emerging Markets Beverages Index outperforming the MSCI ACWI Beverages and MSCI World Beverages indices.

© db January 2007