Mexico

Mexico’s private pension funds (Afores) have played a key role in supporting the growth of the domestic capital market since the late 1990s. Now it’s time for them to diversify, writes Philip Moore.

Mexico could hardly enjoy a better reputation among emerging market investors right now, with companies in the country revelling in their new role as darlings of the capital markets. GlobalCapital met leading borrowers and banks in Mexico City to discuss how far-reaching the effects of the energy reforms will be, and the prospects for peso-denominated funding amid the government’s attempts to entice international buyers into the domestic corporate debt market.

Mexico is seen as a bright spot in the emerging markets, and investors are hungry for assets. But while disintermediation has provided plenty of fodder in corporate funding markets, the banking sector has yielded far less issuance. Could an increase in lending tip the scales? Will Caiger-Smith reports.

Larger companies needing growth capital have a useful source in Mexico’s stockmarket, where demand in roughly equal quantities from domestic and foreign investors has supported a strong rise in issuance. It is going through a dip this year – but as Jon Hay reports, if Mexico delivers on reforming energy markets, there will be plenty of deals to come.