And the vicious circle does not stop, the low offer limits the demand, the arrival of new investors that inject capital. At least locally, since the global market is going from strength to strength and already represents 50% of the total value traded in the capital market (this, thanks to the International Quotation System -SIC-, which allows investors in Mexico to access titles listed in other markets); however, by regulation, the Afores have limits regarding the investment that their portfolios allocate to foreign assets, which also limits the offer to their clients.
the house never loses
The capital market situation has not affected the finances of Grupo BMV, which has managed to post record income and profits, which have doubled in the last 10 years.
“I would tell you that one of the strengths of Grupo Bolsa Mexicana de Valores is precisely the diversification that we have,” says Bosch. And it is that within the group there are several companies that diversify their income: broadcasters, markets and information services (Mexican Stock Exchange), derivatives operation (Mexder), the Central Securities Depository (Indeval), Central Securities Counterparts and Derivatives (CCV and Asigna), the voice and electronic broker with presence in Mexico, Peru and Chile (SIF ICAP), price provider and risk manager (Valmer).
The capital market, the purchase and sale of titles, although it seems that it is the core of the business, in reality it only represents 8% of the total income. “And if you ask me how much it will represent in a few years, I think even less,” says Bosch.
As the world evolves, the fees transactional (what is charged per operation), are increasingly lower because costs are falling thanks to technology and automation, so companies in this sector are betting more and more on information.
The BMV’s information sales business represented 11.5% 10 years ago, and today it is already 17% of the group’s total income. “Who buys all that information that the BMV generates? The traders of algorithm, what we call the algotraders, They already do all the automated operations. With the information that we sell them, they put together their strategies”, explains Bosch.
Thanks to the diversification of the group, the loss of participation in the operations that they have had after the best execution rule came into force is not something that they lose sleep over. The best execution was created to distribute the operations between the BMV and BIVA. Since then, the BMV’s market share in the volume of operations has gone from 94 to 80%.
“The part that BIVA takes away from us in market share, if the market does not grow, only hits us in capital, because what goes to BIVA we do not lose in the CCV, the clearing house, or in Indeval”, Bosch points out.
Bosch says that, in fact, when BIVA announced that it would start operations, Grupo BMV was happy at the promise that more companies would arrive, which would mean a bigger market and higher income for the group, but it did not happen.
“Yes, the idea was to grow, it was not going to hit us in capital and it was going to benefit us in everything. There would have been more companies and larger markets, and our business grew in terms of capital, it grew in the counterparty, it grew in Indeval and it grew in the information sale part. In other words, we were the happiest and most interested in BIVA fulfilling the whole issue that it was going to grow and develop the market”, says Bosch.
Despite everything, the company does not stop its efforts so that more companies decide to list, and for this they use innovation. Since 2009, BMV Group has explored the creation of various instruments, such as CKDs, Fibras inmobiliaria, SERPIs, Fibras E, SPACs and thematic bonds. The latter have gained special relevance in recent years.
Thematic bonds are all those that are focused on ESG financing (environmental, social and corporate governance). In May, the BMV announced that since they were created, in 2016, they have already accumulated an issued amount of more than 200,000 million pesos.