FEMSA Post-Earnings: Borrow Costs Collapse as Short Score Stabilises

FEMSA UBD has moved into a quieter phase after Tuesday's third-quarter earnings release, with the lending market unwinding sharply and the short score settling at its lowest level in two weeks.

The most striking shift in the data this week is in the cost to borrow, which has fallen from a brief spike to near-normalcy with unusual speed. CTB hit 8.66% on October 2, then climbed back to 3.75% in early October before collapsing to 0.83% by October 27. That is a round-trip of almost the entire spike within a month. The move almost certainly reflects short positioning that was built ahead of earnings and then unwound after the print. Availability remains extremely loose, with far more shares available to borrow than are currently out on loan, so there is no structural tightness in the lending pool. Borrowing FEMSA is effectively free at current rates.

The ORTEX short score, which had briefly touched 26.4 on October 14 during the pre-earnings short build described in last week's note, has now retreated to 25.6. That is a low reading, consistent with the picture of minimal bearish conviction. Short interest was building fast in the days before Tuesday's print: the October 28 earnings-preview note flagged a 23% single-session jump on October 26. What the current data shows is that the borrow market has since normalised, suggesting at least some of that positioning has been covered or rolled off.

The earnings event itself produced a reaction. The most recent historical data point in the snapshot shows the July 28 Q2 print prompted a 8.2% one-day fall and a 5.9% decline over the following five days. The Q3 release on October 27 does not yet carry a recorded post-print move in the structured data, but the stock closed at MXN 231.77 on October 27, down 0.33% on the day and down 2.4% on the week. That modest weekly decline is broadly consistent with a market that was not caught badly offside, though the full picture will only emerge over the next few sessions.

Among correlated peers, KOF (Coca-Cola FEMSA, the bottling subsidiary in which FEMSA holds a stake) fell 3.9% on the week, a softer read than the parent. CCH (Coca-Cola HBC) gained 2.5% over the same period, pulling in the opposite direction. COKE dropped 3.1%. The divergence between the European-listed Coke bottlers, which held up or gained, and the Latin American names, which gave ground, broadly tracks the currency and macro backdrop rather than anything company-specific to FEMSA.

The insider data from the vendor table remains stale, with the most recent recorded trade dated June 10, 2026, and the 90-day net figure of roughly USD 4.6 million in net sales reflecting a director's programme of disposals through March. Nothing in the current data changes that picture.

The next scheduled earnings event is February 23, 2027. Between now and then, the key variable to track is whether borrow costs drift back toward the pre-earnings spike level or continue to normalise lower, which would confirm that the short thesis accumulated in October has been largely abandoned.