Attracting unicorns to the bag, the challenge; BMV

In order to attract new companies and lift the fragile Initial Public Offerings (IPO) market, the Mexican Stock Exchange (BMV) has approached fintech companies and unicorns that could potentially become public companies, said José-Oriol Bosch .

The general director of Grupo Bolsa Mexicana de Valores (Stock Exchange) explained, in the recent conference call with stock market analysts, that the listing of these types of companies would be a catalyst to increase the interest of investors in the national market.

“We are not aware of potential IPOs for any company at this time, but we are working and doing everything in our power to attract new fintech companies, we are talking with a couple of them,” said the executive.

José-Oriol Bosch considered that there are fintechs and unicorns in Mexico that have been very successful in their operations, so it would be attractive to take them public now that the valuations are more attractive, although the final decision is in the hands of each company.

So far this year, the main stock index of the BMV, the S & P / BMV IPC, has accumulated a return of 18.47 percent. In José-Oriol Bosch’s opinion, this has been a significant recovery, even compared to other international indices.

The Brazilian Stock Exchange has fallen almost 10.58% so far this year. For their part, the US NASDAQ and Dow Jones indices accumulate yields close to 18.21 and 16.83%, respectively. The S&P 500 is higher, though, at 21.80 percent.

Four years without IPO in Mexico

Next month marks four years of a deserted IPO market on the BMV. The last company to list its shares on said trading center was Grupo México Transporte, Grupo México’s transportation division, in November 2017.

According to Finnovista Fintech Rada, an indicator of the sector of companies that use technology to provide financial services internationally, in Mexico about 441 fintech startups were identified.

In October of last year Kavak, the used car buying and selling platform, positioned itself as the first unicorn in Mexico. In 2021, it was followed by Bitso, a platform where cryptocurrencies are traded, as well as the digital payments firm aimed at SMEs, Clip.

Data from the BMV indicate that in Mexico there were 441 registered fintechs, and 70% had their headquarters in Mexico City where they carry out their main operations. In the pandemic, services from financial technology companies increased 220 percent.

The general director of the BMV reiterated that they are continuing with their efforts to make the country’s stock market bigger, so they are also looking to grow the investor base, both institutional and individual investors.

José-Oriol Bosch assured that they have constant meetings with the authorities of the country and with the different financial intermediaries to promote the stock market, both on the supply side and on the demand side.

The lack of an IPO impacted the Grupo Bolsa’s revenues, falling 4% in the third quarter of 2021.

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