Capital Markets
From The Report: Mexico 2014
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Low macroeconomic volatility, stable exchange rates and efficient management of the economy and public finances are some of the factors behind the growth of Mexico’s capital markets and the record number of initial public offerings announced in 2013. With the second-largest stock exchange in Latin America, Mexico’s recent performance showed growth in volume as well as in value. In 2013, the volume of shares negotiated on the Bolsa Mexicana de Valores (BMV) was 96.4bn, reaching a value of $282.05bn, and up 8.3% on 2012. Optimism about structural reforms and an improvement in the credit rating from international agencies are attracting foreign capital and making financing cheaper for the government and companies alike. The Latin American Integrated Market, a joint stock exchange that integrates stock markets from Peru, Chile and Colombia, could become another channel for the internationalisation of the BMV as early as 2014. This chapter includes an interview with Luis Téllez Kuenzler, Chairman & CEO, Bolsa Mexicana de Valores.

Articles from this Chapter

Overview

Upward trajectory: Market performance opens door to greater internationalisation
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The Mexican economy has been going through a period of significant development. There is a large degree of optimism both domestically and on the international scene. After being in the shadow of the BRICS countries (Brazil, Russia, India, China and South Africa) over the past few years, Mexico is back in the spotlight. Macroeconomic stability, optimism about structural reforms, and an improvement in the credit rating from international agencies have been attracting foreign capital and making financing cheaper for the government and companies alike. For Juan Guichard, the CEO of INVEX Grupo Financiero, low macroeconomic volatility, stable exchange…

Analysis

Looking forward to retirement: Strong performance boosts attraction of pension funds
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Since 1997, the Mexican retirement savings system has operated under the defined contribution system of individual capitalisation that replaced the pay-as-yougo system (defined benefit). Under this regime, contributions are compulsory for employee, employer and government, with the National Commission for the Pension System (Comisión Nacional del Sistema de Ahorro para el Retiro, Consar) the main regulator. Background The financial institutions managing pension funds are the retirement fund administrators, known in Spanish as “administradoras de fondos para el retiro”, or Afores. There are currently a total of 11 Afores in Mexico, managing…

Interview

OBG talks to Luis Téllez Kuenzler, Chairman & CEO, Bolsa Mexicana de Valores
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Interview:Luis Téllez Kuenzler Why was there a record number of new listings in 2013, a year of economic slowdown? LUIS TÉLLEZ KUENZLER: Mexico already has a very solid base of institutional investors in pension funds and investment funds, which have over $150bn and $160bn, respectively, under management. This base was non-existent 15 years ago but is now a mainstay of our capital markets. The size of foreign investment, mainly channelled through New York, shows confidence in the Mexican…

Analysis

Genomma Lab Internacional: Pharmaceuticals
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The Company Genomma Lab Internacional (LABB) is one of the leading companies in Latin America focusing on pharmaceutical and personal care products. The group’s operations go across the supply chain, from design, product development and production to sales and marketing of a broad range of premiumbranded products. Many of these products are leaders in the categories in which they compete in terms of sales volume and market share. The Mexican market comprises 66% of Genomma’s revenues. The business segment covered by the company is over-the-counter (OTC) products, which can be bought without a prescription. Genomma is also considered a strong…

Analysis

Alsea: Food and beverages
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The Company Alsea (ALSEA) is a leading restaurant operator in Mexico and Latin America. It has a multi-brand portfolio including the operation of Domino’s Pizza, Starbucks, Burger King, Chili’s, California Pizza Kitchen, P.F. Chang’s, Pei Wei, Italianni’s and The Cheesecake Factory. Alsea’s business model includes backing for all of its business units through a shared services and support centre that provides assistance to all of the administrative and development processes, as well as the supply chain. The total value of the consumer food service industry in Mexico stands at around $60bn, according to Euromonitor, a London-based market…

Analysis

Cemex: Cement
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The Company Cemex (CEMEXCPO), is a holding company primarily engaged in the production, distribution, marketing and sales of cement, ready-mix concrete, aggregates, clinker and other construction materials in more than 50 countries. The company is one of the largest cement groups globally, based on its annual installed cement production capacity of around 95m tonnes in 2012. Further, in addition to being the largest ready-mix concrete group worldwide, with annual sales volumes of about 55m cu metres, Cemex is also one of the largest aggregates companies, with annual sales volumes of around 159m tonnes (2012). According to company sales, Northern…

Analysis

Compartamos: Banking
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The Company Compartamos (GENTERA) is a microcredit bank and a leading provider of microfinance services, including loans, savings, insurance, methods of payment and financial literacy in Mexico. It is currently the largest institution in Latin America offering financial services to low-income clients. The group began operations in 1990, when Asociación Programa Compartamos was founded as a nongovernmental organisation (NGO) offering financial services to the grassroots base of the socio-economic pyramid. Initially, these services were only offered to women; however, this soon expanded to the wider Mexican microfinance industry. In 2000, the…

Analysis

Grupo México: Mining
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The Company Grupo México (GMEXICOB) is primarily a mining company but also has operations in several different sectors and ranks among the most important mining companies in Mexico, Peru and the US. GMéxico has the largest copper reserves worldwide and is also the fourth-largest copper producer. Likewise, the company is a leader in low-cost production with fully integrated operations. However, GMéxico is much more than just a huge mining company. The company also incorporates the largest multimodal rail service in Mexico and has a substantial infrastructure development division with attractive growth prospects. GMéxico has been listed on…

Analysis

Empresas ICA: Construction
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The Company Empresas ICA (ICA) is the largest infrastructure, engineering, procurement and construction company in Mexico. The firm operates in government priority sectors that support the country’s economic development. ICA owns the strongest operative structure among national infrastructure developers, which allows it to participate in a large number of major projects. ICA’s operations are divided into four segments: construction (74% last 12 months sales); concessions that include highways, water projects, ports and prisons (13%); airports via its subsidiary Oma (12%); and corporate and others (1%), in which housing is included. ICA wants…