Mexican Stock Exchange

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Mexican Stock Exchange
Bmv group.jpg
Founded 1886
Headquarters Mexico City
Key People Luis Téllez, chairman
Products Bolsa Index stock benchmark, ADRs
Website www.stockexchange.com.mx

The Mexican Stock Exchange (MSE) offers investors complete electronic trading of its several hundred mostly listed equities, mutual funds and bonds, plus American Depository Receipts (ADRs) that allow U.S. investors to trade Mexican securities directly. The MSE is known locally as Bolsa Mexicana de Valores (BMV) but this name is often confused with that of the exchange's ownership group, Bolsa Mexicana de Valores S.A.B.. It is Latin America's second-largest exchange after Brazil's BM&FBOVESPA.

Background

The Mexican Stock Exchange began in 1886 as the Mexican Mercantile Exchange (Bolsa Mercantil de Mexico) but changed its name in 1975 after acquiring two smaller exchanges in Monterey and Guadalajara.[1] The MSE expanded soon afterwards to become one of the world's fastest-growing listed exchanges by the early 1990s and attain market value of around US$200 billion by 1994, although this had fallen to US$70 billion by 1996.[2]

In 1999 the MSE switched to an all-electronic trading platform known as BMV-SENTRA and nine years later sold its shares via an initial public offering (IPO). The resulting sale turning owner the Bolsa Mexicana de Valores S.A.B. (BOLSAA.MX), also owner of the Mexican Derivatives Exchange (MexDer), into Mexico's most widely held company. As of March 2009 the MSE was listing 130 domestic stocks and 618 mutual funds plus 346 foreign equity securities and foreign debt securities.

Key Products

  • American Depository Receipts (ADRs): The Mexican Stock Exchange allows U.S.-based investors to trade these receipts for Mexican securities via any licensed U.S.brokerage or broker-dealer.[3] Most Mexican Stock Exchange ADRs traded in the U.S. are for larger listed Mexican companies, while some Mexican mutual funds can be traded directly on the New York Stock Exchange.
  • IPC Index: The MSE's benchmark IPC Index, also called the Bolsa Index, consists of the 35-40 leading stocks on the Mexican Stock Exchange weighted for market capitalization. Up to August 2009, Bloomberg reported that the index had surged 22% to outstrip all other North American financial benchmarks despite Mexico's economy shrinking 10% in the second quarter of 2009.[4]

Key People

Latest News

In March of 2011, what became known as, Bolsa Mexicana de Valores was in “very advanced” talks with its Brazilian counterpart BM&FBovespa over an order routing agreement expected to increase trading volumes between Latin America’s two largest bourses significantly.[5]

MSE hopes to expand its IPO market in the future, according to Tellez as reported by Bloomberg in mid-August 2009.[6] Tellez told Bloomberg he expects some new share offerings to reach the market by late 2009 or early 2010 and mentioned a consumer goods company and an infrastructure developer as likely first offers. On the same day, market regulator the NBSC authorized four new infrastructure trusts to be listed on the MSE and aimed at financing projects through the US$75 billion in assets held by Mexico's pension funds.[7]

Disappointing 2009 predictions, the Mexican Stock Exchange saw a decrease in IPO activity because many companies were reluctant to open their books to outside firms. The last listings by companies were pharmaceutical company Genomma Lab Internacional and the stock exchange operator Bolsa Mexicana de Valores in 2008. The exchange announced in February of 2010 that they expect to see an increase in this area due to regulatory changes that give Mexican pension funds greater flexibility to invest in individual stocks. [8]

On June 19, 2014, the exchange said it would connect to stock exchanges in Chile, Colombia and Peru by the end of the year through the Latin American Integrated Market, (MILA), nearly doubling the size of that entity. According to the World Federation of Exchanges, Mexico's stock market is nearly as big as those of the three Andean countries combined.[9] New securities legislation at the beginning of the year paved the way for BMV to join the exchanges that make up MILA.[10]

References

  1. Mexican Stock Exchange. MSE.
  2. The Mexican Stock Exchange. Photius.com.
  3. The Mexican Stock Market. Mexonline.com.
  4. Bolsa Tops Nafta as Mexican Giants Beat Recession. Bloomberg.
  5. BMV In Talks With Bovespa Over Routing. FT.com.
  6. Mexico Bolsa May Get IPOs by Late 2009, Early 2010, Tellez Says. Bloomberg.
  7. Mexico Trusts to Tap $75 Billion Pension Assets. Bloomberg.
  8. Mexico's Stock-Market Regulator Sees IPO Recovery in 2010. Wall Street Journal.
  9. Mexico stock exchange to be linked to LatAm bourses in 2014. Reuters.
  10. Mexico set to join regional stock exchange by year-end. BN Americas.