Mexico’s BIVA stock exchange eyes reform to lure more firms

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MERIDA — Mexican second-biggest stock exchange expects reform legislation to be ready within the next three months that would encourage more companies to offer stock to the public, the head of the upstart bourse said in an interview on Friday.

Maria Ariza, chief executive of the Bolsa Institucional de Valores, or BIVA, said the proposal would “boost and accelerate the entry of new entities to the market,” particularly smaller firms.

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A consensus among company executives and authorities has emerged that such a reform is needed, she said, highlighting that it will include simplified registration and allow a company to go public in just around three weeks.

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The reform has not been proposed to lawmakers, and Ariza did not provide further details on the steps to come.

Bloomberg News reported on Friday that the government of President Andres Manuel Lopez Obrador backs the stock market reform, quoting the deputy finance minister as saying officials are evaluating when to present it to Congress.

Mexico’s main stock exchange, where shares of heavyweights like America Movil and Grupo Mexico are traded, is the Bolsa Mexicana de Valores.

Ariza argued more needs to be done to convince growing companies, including local unicorns – privately held startups valued at over $1 billion – to list shares on the local exchange rather than abroad.

But she said low levels of trading on the two Mexican exchanges limits the valuation companies are able to achieve by listing locally.

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Nearshoring, the trend of moving production closer to North American buyers and away from Asia, will make Mexico a more attractive destination for investors and local companies, accelerating their path to offering publicly traded shares, Ariza said.

Mexico’s BIVA launched in 2018 in a bid to entice more companies to go public.

At the time, Ariza said BIVA would lobby the Lopez Obrador government to make regulatory changes to encourage more initial public offerings and institutional investment. (Reporting by Valentine Hilaire and Noe Torres; Editing by Anthony Esposito, Sarah Morland and William Mallard)