RESEARCH ALERT-Banamex upgrades Mexico's Alfa

MEXICO CITY Feb 17 (Reuters) - Banamex said in a report released on Tuesday that it upgraded Mexico's Alfa to "hold" from "sell" on the assumption that the market has already priced in a round of bad news for the conglomerate.

"The poor performance since Dec. 1, 2008, which saw shares fall 69 percent versus a decline of 35 percent of the stock index, must have already priced in the bad news expected by the market, particularly in the petrochemical and auto industries," Banamex said in a report.

Last week Alfa (ALFAA.MX) said it expected sales to fall 21 percent in 2009 as the economic downturn hurts demand for its products although the company will generate enough cash flow to meet $215 million in debt maturing this year.

The company's petrochemical unit, Alpek, and its auto component maker, Nemak, are very exposed to raw material price drops and depressed demand from the global financial crisis.

Alfa shares slipped 4.11 percent to 21.71 pesos on Tuesday as the broader market was pummeled by global economic woes. (Reporting by Cyntia Barrera Diaz, editing by Gerald E. McCormick)