Stock Market Guide to the Mexican Stock Exchange
The Bolsa Mexicana de Valores, also referred to as BMV or the Mexican Stock Exchange, is the chief stock exchange in Mexico. Located in Mexico City at Paseo de la Reforma, BMV is a private limited company. Shareholders of Mexico's stock exchange are all brokerage firms. BMV trades in debt instruments such as CETES (Federal Treasury Certificates); investment unit bonds, BONDES (federal government development bonds); Bankers acceptances, development bank bonds, warrants, debentures, stocks, mutual fund shares and so forth. The BMV-SENTRA Equities System allows for trading to take place electronically.
The basis for the Mexican Stock Exchange came soon after President de la Madrid came into office. He provided for the founding of private brokerage houses. For many years BMV enjoyed great growth, but its index dropped drastically following the USA’s stock market crash in October 1987. Mexico’s stock exchange managed to come out of the slump and was amongst the fastest growing stock exchanges in the world by the 1990s. Unfortunately 1995 saw another drop in the stock index, but once again it recovered. Since that time it has seen much growth.
The Mexican Stock Exchange deals with 13 indices of stock prices. The IPC or Índice de Precios y Cotizaciones is the benchmark stock index and is the widest indicator of the stock market’s complete performance. A number of companies are listed with the Bolsa Mexicana de Volores. Amongst the top companies on Mexico’s Stock Exchange are Cemex (cement maker); América Móvil (wireless communications); Telmex (telecommunications); Televisa (media) and Grupo Corvi (consumer products distribution).
Mexico has what is referred to as a free market economy. It is noted for having just become a part of the trillion dollar class. Interestingly Mexico is a blend of modern and somewhat obsolete agriculture and industry. There has been greater competition in regards to telecommunications, airports, railroads, natural gas distribution and so forth. Since the North American Free Trade Agreement (NAFTA) was adopted in 1994 there has been a three-fold increase in trade with the USA and Canada. In fact, Mexico holds free trade agreements with some 40 countries. The main exports from Mexico are oil and its products, coffee, manufactured items, vegetables, fruit, silver and cotton. Imports include agricultural machinery, metalworking machines, electrical equipment, car parts, aircraft, aircraft parts and steel mill products. Various improvements still need to be made to the labor laws, infrastructure and tax system of Mexico and the government still has work to do on increasing economic growth, reducing poverty and boosting the country’s international competitiveness. Despite the obstacles, Mexico saw a real growth rate of 3% in 2005, a good indicator that the country is up for the challenge.