Capital Markets
From The Report: Mexico 2018
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While corporate bond issuances have only expanded at a moderate rate, Mexico’s sovereign bond market has long been a central component of the bourse’s activity, attracting a growing volume of foreign players. An assortment of new structured products launched over recent years has helped channel market investment towards infrastructure development in areas such as transport and energy. Despite external challenges, the Mexican Stock Exchange has proven effective at introducing innovative products and keeping investors interested in what is on offer. While higher interest rates expected over 2018 and 2019 may make some new products less appealing, the diversification brought about by special purpose acquisition companies, real estate investment trusts, first investment project certificates and development capital certificates is likely to attract new investors and help bridge the gap between capital market utilisation and financing the country’s economic needs. This chapter includes interviews José Oriol Bosch Par, CEO, Mexican Stock Exchange; and Santiago Urquiza Luna-Parra, President, Institutional Stock Exchange.

Articles from this Chapter

Overview

Scaling up: A new bourse and diversified instruments aim to pique investor interest and increase listings
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Despite having a diversified economy and the second-most actively traded emerging market currency in the world, Mexico’s capital markets have remained underdeveloped relative to its potential. The same regulatory caution that helped strengthen the banking industry after the 1994-95 financial crisis also designed a tight oversight framework for the bourse. As the system was reinforced, new investment vehicles brought dynamism and added variety to the menu of investment options. While corporate…

Analysis

Solid partnership: Pension funds remain a critical component of capital markets
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Since reforms in the 1990s, pension funds have become a key investor in the country’s growth. Their presence has expanded from traditional investment vehicles, such as sovereign debt, to more sophisticated products that have brought variety to Mexico’s capital markets and channelled financing to infrastructure projects. Pension funds account for 15% of GDP, according to March 2018 figures by the Mexican Association of Pension Fund Administrators ( Asociación Mexicana de Administradoras de Fondos…

Interview

Risk and reward: José Oriol Bosch Par, CEO, Mexican Stock Exchange (Bolsa Mexicana de Valores, BMV), on the increased relevance of capital markets
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José Oriol Bosch Par : Interview How has the greater availability of instruments on the exchange helped provide financing and engagement with other sectors of the economy? JOSÉ ORIOL BOSCH PAR: Over the last few years the Mexican stock market has matured substantially, and we now match many global exchanges in terms of the variety of instruments available. The challenge is to further engage the investor community and use the instruments available to us. Various new investment vehicles have been…

Interview

A capital idea: Santiago Urquiza Luna-Parra, President, Institutional Stock Exchange (Bolsa Institucional de Valores, BIVA), on the need for a multi-faceted boost to the capital markets
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Interview :Santiago Urquiza Luna-Parra Given Mexico’s low market cap relative to the size of its economy, is there room for a second exchange? SANTIAGO URQUIZA: Although many argue that the market should be reformed, rather than introducing another exchange, increased service provision is always healthy. All 14 countries with economies larger than Mexico’s have at least two stock exchanges, except for Brazil, which has one. The US, meanwhile, has 13. It is disappointing that Mexico, the…

Analysis

Trading hands: Peso volatility affects businesses, investors and individuals
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The Mexican peso has long been viewed as the bellwether of emerging market currencies and a signal of overall market sentiment. While it is the second-most traded currency among emerging markets, after the Chinese renminbi, the peso is considered the more accessible of the two as it can be traded around the clock. A period of stability when the peso equalled roughly MXN13:$1 from mid-2009 to the end of 2014 has been followed by the currency losing significant value in recent years, reaching a record…