Author: OBG Admin

Éric N’guessan-Managing Partner-EY Côte d’Ivoire

Building bridges: MILA is helping to open up the country’s equities

Posted OBG AdminPosted in Uncategorized

In late 2014 the Mexican Stock Exchange (Bolsa Mexicana de Valores, BMV) joined the Integrated Latin American Market (Mercado Integrado Latinoamericano, MILA). The market was first set up in December 2011 by the stock exchanges of Chile, Colombia and Peru. MILA’s aim is described as “generating more and better exposure of the stock markets that integrate, as well as [a] wider range of products and opportunities for local and foreign investors”. The four countries making up MILA are also members and co-founders of the Pacific Alliance trade bloc. MILA’s basic proposition is that stocks and shares listed in one exchange should be visible and tradable

George Richani-CEO-Al Ahli Bank of Kuwait

Opportunities abound: Banks are developing mobile and internet banking services for a growing number of online customers

Posted OBG AdminPosted in Uncategorized

Mobile and internet banking is at a relatively early stage of development in Mexico, but most players are convinced that it is the shape of things to come, and that banks that do not invest in developing their online and mobile presence are at risk of losing market share. According to a study by BBVA Research, around 16% of Mexico’s total banking transactions are carried out online, and 6.4% of them are done through mobile phones. For comparison, the study said 40% of Brazil’s transactions

Daouda Coulibaly-Managing Director-Société Ivoirienne de Banque

Starting small: Entrepreneurship is common, but greater support would spur growth

Posted OBG AdminPosted in Uncategorized

There is growing interest across Mexico in innovation and entrepreneurship, and in how they can contribute to raising the country’s levels of productivity, employment and economic growth. However, a review of what is happening in the country in this important space must be undertaken in two parts. The first involves the acknowledgment that as a developing economy Mexico faces serious structural problems, some of which pose real obstacles and significant challenges to the kind of innovation and entrepreneurship that is desired. The other is much more encouraging: there are real signs that limitations are being pushed back and that new approaches are beginning to gain

Corporate bond market: Reforms set to drive new issues and boost liquidity

Posted OBG AdminPosted in Uncategorized

The corporate debt market in Latin America remains relatively small, and Mexico is no exception. As of December 2014, there was MXN1.02trn ($68.65bn) in outstanding corporate long-term bonds, including corporate, state, municipal and infrastructure issues, as well as those from state-owned companies and federal agencies. Corporate debt issuance has grown at a compound annual growth rate (CAGR) of 14.1% since 2009, increasing by 6.4% in 2013. Over the last five years alone, corporates have issued a combined MXN917bn ($61.71bn), for a CAGR of 8.1% over the period. Sustained Growth Recent years have seen more robust growth in the private long-term bond market, thanks in part

Pham Hong Hai-CEO-HSBC Vietnam

Profitable activity: Lending continues to grow, while the ratio of non-performing loans falls

Posted OBG AdminPosted in Uncategorized

During their annual convention in May 2015, leaders of the Mexican Banking Association (Asociación de Banqueros de México, ABM) said that the industry was doing well. “Mexican banking is experiencing the best credit growth cycle in its history,” Luis Robles Miaja, president of the ABM, said, adding that “credit has been growing at a rate 3.7 times faster than GDP over the last 11 years”. The ABM said lending to all sectors had expanded in the first quarter of 2015, while non-performing loans (NPLs) had fallen to 3% of the total. During the first four months of the year total credit to companies (public and

Nhon Luc Ly-CEO-AIA Myanmar; Son Nguyen-Country President-Chubb Life Insurance Myanmar; Daw Zarchi Tin-CEO

Wealth reserves: The nation’s sovereign wealth fund gets a slow start

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On January 1, 2015 the new Mexican Oil Fund for Stabilisation and Development (Fondo Mexicano de Petróleo para la Estabilización y el Desarrollo, FMP) began operations. The FMP was created as part of the package of energy sector reforms and constitutional changes approved by Congress during the course of 2013 and 2014. Technically, it is intended as a sovereign wealth fund, destined to receive, manage and distribute income (excluding taxes) from upstream oil and gas activities. Importantly, apart from covering a proportion of Mexico’s current public expenditure commitments, the fund is designed to invest its income for long-term future savings. Government officials and politicians have

Daniel Asare-Kyei-CEO-Esoko; Curtis Vanderpuije-CEO-ExpressPay; and Daniel Marfo-General Manager-Zipline Ghana

Higher standards: The new insurance law will further strengthen the industry

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Mexico’s new insurance and sureties law (Ley de Instituciones de Seguros y de Finanzas, LISF) came into effect in April 2015. The law, considered one of the most advanced of its type in Latin America, seeks to bring the country into line with the Solvency II insurance industry regulatory standards developed in Europe. The new solvency framework consists of three pillars: pillar I concerns capital adequacy and valuation; pillar II sets standards of enterprise risk management; and pillar III concerns transparency and market disclosure. After the introduction of LISF, in June 2015 the European Commission recognised the solidity of Mexico’s insurance regulations, placing the country

Emmanuel Macron-President of France

Extraction protraction: Despite major hurdles, shale still holds great potential

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At first glance, the story of Mexican shale oil and gas sounds frustrating. Like its northern neighbours Canada and the US, Mexico has some of the world’s largest shale deposits. The government’s deep energy reforms of 2013-14 created an environment attractive to international oil companies (IOCs) willing to invest the tens of billions of dollars needed to develop shale. But in 2014-15, just as the country seemed poised to unleash a shale revolution of its own, with the sale of exploration and production (E&P) licences for some of its prospective basins, international oil prices collapsed. The revolution may have been postponed. While development will be

Sovereign bond market: 20 years on, Mexico becomes an emerging market success story

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In the 20 years since the Tequila Crisis, Mexico has undergone an impressive transformation. The implementation of sound macroeconomic policies has been welcomed by global investors, resulting in greater confidence in the country’s credit risk profile, while recent structural reforms are expected to boost growth, investment and competition. Mexico has emerged as an attractive market for investors seeking balanced strategies in an emerging market context – namely, interesting yields and well-contained risk. The country has been classified as investment grade by major ratings agencies, with an “A3” rating from Moody’s and a “BBB+” by Standard & Poor’s and Fitch, and is headed towards a select

Stock market: Despite emerging market downturn, solid prospects in Mexico

Posted OBG AdminPosted in Uncategorized

Return Of Risk Aversion During the last four months of 2014 emerging equity markets faced a strong decline. This was mainly due to foreign capital outflows, bolstered by a higher degree of risk aversion amongst investors and driven by the slump in oil prices, geopolitical uncertainty in Ukraine, Greece and the Middle East, and the anticipation of monetary policy normalisation by the US Federal Reserve. Against this backdrop exchanges in Latin America suffered losses. Mexico was not immune to this volatility, with its benchmark index (Índice de Precios y Cotizaciones, IPC) performing in line with international peers. According to EPFR Global, a provider of fund