By Anirban Sen
NEW YORK (Reuters) -Mexico's main stock exchange operator plans to list options on major U.S. stocks such as Amazon, Apple and other big names by the end of this year, its chief executive told Reuters.
Grupo BMV, or Bolsa Mexicana de Valores, will debut exchange-traded equity options on international stocks favored by Mexican retail investors, starting with large U.S. technology names, CEO Jorge Alegria said in an interview. The options will trade in Mexico, be cleared and collateralized
in pesos, and complement existing cash trading of foreign shares locally, he added.
"We are putting money into technology to allow a more active options market for equities in Mexico," Alegria said.
Alegria took over the exchange last year, tasked with boosting liquidity on the flagging bourse and revitalizing trading as a number of big names have left in recent years.
Separately, the Mexico City-based exchange operator expects a pickup in listings of small and mid-sized companies through special purpose acquisition vehicles, or SPACs as they are popularly known.
Mexico has its own publicly traded investment vehicles referred to as CKDs (Certificados de Capital de Desarrollo) or CERPIs (Certificado de Proyectos de Inversión), and largely operate infrastructure trusts hosted by managers such as Mexico Infrastructure Partners, Credit Suisse and BlackRock.
Alegria expects Mexico's new simplified listing rules to help more mid-sized companies go public in the near term, with the first deal under the new framework expected to launch by the end of this year.
In late 2023, Mexico launched new rules that would make it easier for smaller companies to seek stock market flotations, and for listed companies to be able to pursue deals such as follow-on offerings and debt issuances.
The new regulations were part of a sweeping effort to revive Mexican capital markets, which have struggled to attract major IPOs in recent years. Last year, local retailer BBB Foods decided to pursue a listing on U.S. exchanges to tap higher valuations, instead of launching a share sale in Mexico.
Grupo BMV, however, expects to witness a pickup in IPO activity in the country on the back of the new listing rules.
Mexican airline Aeromexico and Citi's retail unit in the country, Banamex, are among the high-profile names that are expected to tap the IPO markets in the near term, though both have previously floated listing in New York.
Grupo BMV also expects electronic trading of bonds to pick up significantly in the near term, Alegria said.
“The logical next step is an electronic platform to trade Mexican bonds,” said Alegria, adding that clearing of bonds on Mexican markets will attract global liquidity and accelerate a shift long underway in U.S. Treasuries and corporate debt.
Round-the-clock equities trading is not imminent, though Grupo BMV is upgrading its existing technology infrastructure to be potentially ready to handle larger volumes associated with 24X7 trading in the coming years, Alegria said.
Alegria, a former CME Group executive, said Grupo BMV is also prioritizing data monetization and international licensing to support growth and close a valuation gap with larger global exchange operators.
“We need to be seen as a growth story,” Alegria said.
(Reporting by Anirban Sen in New York; Editing by Kylie Madry and Lisa Shumaker)
