VIEW FROM THE TOP
CAPITALIZING ON THE MEXICAN STOCK MARKET JOSÉ ORIOL BOSCH CEO of BMV Group
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Q: What is the BMV doing to strengthen Mexico’s financial
tomorrow, there would not be a market big enough to
culture?
buy these shares. To create a healthy trading market, a
A: Our main priority in this matter is to continue developing
balance of both companies and investors is needed. If
a stronger financial and trading culture when it comes
we had a larger retail base such as the one that Canada
to businesses, investors and brokerage firms. The stock
has, we would be able to increase participation in the
exchange and brokerage firms are collaborating to develop
Mexican stock exchange. Banks and brokerage firms can
products and services that can better serve different types
change this context by offering more financial education
of companies and projects. Traditionally, the stock exchange
as trading activity has little penetration in the country.
serves the debt and equity market as other exchanges, but in the last few years it developed nontraditional equity-
Q: The average value of a company in the BMV is US$2.5
financing instruments, such as CKDs. The tool developed
billion dollars while other countries average US$600
out of the country’s need for investment to generate
million. How can the stock exchange be more accessible
resources, employment and new companies.
to smaller companies? A: We are trying to encourage smaller companies to
CKDs have financed over MX$100 billion since their creation
participate but as mentioned, the lack of financial culture
with close to eighty emissions. The main industries that
is a challenge. Our team is traveling to different states to
participate in CKDs are infrastructure, real estate and
teach companies about the benefits the BMV can offer.
private equity but the mining industry could take advantage
We found that in many of these states businessmen have
of it as well. CKDs could be an area of opportunity for
no idea how the stock exchange works. First of all, many
miners to finance their projects. It would be useful for small
of these companies think they are too small for the stock
exploration companies.
exchange while regulation allows them to participate with 20 million units of direct investment (UDI) in paid
Q: What are the main challenges you face when it comes
in capital, which is as little as MX$120 million pesos.
to promoting the participation of companies in the BMV? A: The biggest challenge is creating a financial culture in
Of the 5 million companies that are registered in the
Mexico that is open to investing in the stock exchange. The
country, thousands would qualify for listing on the BMV
country has 5 million registered companies and only 350 are
when it comes to capital. Sushiito is an excellent example
using the BMV as a form of finance, of which 150 participate
of a family company that just recently listed debt for only
in the capital market. Only 400,000 companies use other
MX$150 million.
methods such as credit. Investors also believe they need to invest large quantities Another issue is that over 90 percent of the 350 companies
of money and do not realize that there are over 30
on the BMV are divided among only four states in Mexico:
brokerage firms in the country that can offer them a
Mexico City, Nuevo Leon, Jalisco and the State of Mexico.
wide variety of options. Society needs access to this
There are 32 states in the country and 12 of these, such
information to be aware of the tools and services we
as Zacatecas, Durango and Guerrero, do not have any
can offer to finance their projects.
companies listed on the Mexican Stock Exchange in either capital or debt markets, regardless of the industry. It is inhibiting growth and expansion in the country’s economy.
BMV Group is the second-largest stock exchange in Latin America, with a total market capitalization of over US$530
But the root of the problem goes beyond the number of
billion. It operates cash, listed derivatives and OTC markets for
companies listed. If 200 companies were to list on the BMV
multiple asset classes
