Shares of Mexican homebuilder Ara hit 5-year high

The homebuilder industry has suffered in recent years after failing to adapt to changing consumer preferences and new government rules.

(Photo: Archive)
English 12/04/2016 19:29 Reuters Actualizada 19:30

Shares of Mexican homebuilder Consorcio Ara hit their highest in five years on Tuesday amid a recovery in the country's battered housing sector.

The homebuilder industry has suffered in recent years after failing to adapt to changing consumer preferences and new government rules that prioritized urban high rises over family homes away from city centers.

Ara, the biggest homebuilder on Mexico's stock exchange, adjusted to the changes better than many of its peers like Geo and Homex, which were forced to file for bankruptcy protection.

Ara last week announced it expects profit to jump 12 percent this year, and revenues to rise 8 percent.

The firm's shares closed up 10.3 percent on Tuesday after rising as high as 17.5 percent to 7.27 pesos, a level last touched in late April 2011.

The sector as a whole is also on an upward path, with the homebuilder subindex Habit, which includes Ara, rising 9.3 percent on Tuesday. Gerardo Copca, from the Metanalisis consulting firm, said Ara's spike is not tied to the company in particular but to the positive fortunes of the entire sector.

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