Biva did not fragment, it helped the stock market grow: Ariza

Through the Institutional Stock Market (Biva), investments of more than 380,000 million pesos have been channeled in four years, through the issuance of different financial instruments such as shares, debt, as well as real estate and infrastructure fibers, Capital Certificates of Development (CKD) and Certificates of Investment Projects (Cerpi), announced the general director of the stock exchange, María Ariza.

The board of directors said that despite the complex scenarios of recent years in the country, more than 25 new companies have been listed in Biva since 2018, when it started operations.

Some of these issuers are Cox Energy, which carried out the first Initial Public Offering (IPO), after four years without any offer of this type in the Mexican stock market. Other new companies that entered the Mexican stock market thanks to Biva have been Hospitales MAC, Total Play, Fortem Capital and Capital Indigo.

They have also landed at Biva Fibra Orión, Fibra Soma, Fibra Xinfra and Promotora MexPac. Last week, Agrofibra debuted, the first real estate investment trust (Fibra) focused on the agro-industrial market. Even next year, the offer of shares of Globcash, a company in the pledge business, is expected.

María Ariza highlighted as another of Biva’s achievements, after having opened competition in the Mexican stock market, the reduction of up to 43% of listing and maintenance fees for all broadcasters in the market.

Another change that Biva generated with its start of operations, he stressed through a note published on the LinkedIn social network, was the increase in the average amount traded in the market, which is 40% more than four years ago, reaching 22,000 million pesos per day, when in 2018 16,733 million pesos were reported.

For their part, the accounts of brokerage houses in the country have grown from 241,000 to 4.1 million at the end of the second quarter of 2022.

There are currently around 69 companies listed on Biva. Most have issued short and long-term debt, others more CKD, Cerpis and Real Estate Investment Trusts (Fibra). Government entities such as Banobras, Fira and Fonacot have become recurring issuers of debt.

The controversies continue

With these results, María Ariza assured that the stock market she directs has contributed to the growth of the country’s stock market, so the indications that with her arrival the market has fragmented “are a fallacy.”

“Fragmenting would be dividing the volume operated before the existence of Biva, but that has not happened, since it has increased significantly and is observed by virtue of having gone from having 4 million daily positions on average before 2018, to the most than 10 million in the entire market today,” said the board.

He highlighted that operations in the local stock market have gone from 325,000 events on a daily average, to more than 450,000 in four years, these figures show a growth of 36 percent.

Through the publication, María Ariza reversed an article published (also on LInkedIn) by the general director of the Mexican Stock Exchange (BMV), José Oriol Bosch, in which he pointed out that Biva’s competition “has obeyed more to a song of sirens that was disguised as a speech about opening up to competition”.

According to the manager, the competition “failed to increase market share, improve conditions for intermediaries, increase liquidity, and much less solve the pending task of attracting new broadcasters.”

“Reality and the song of the sirens under the guise of competition has resounded in a luck that the stock market in the country has not existed or improved and that has only caused, in addition to a brake, a fragmentation of the local market” , exposed José Oriol Bosch.

This fragmentation, he added, has led to an increase in costs for brokerage firms, affecting their profitability and increasing to eight from six the number of brokerage firms that reported losses between 2017 and 2021, out of a total of 36 intermediaries in Mexico.

On this, the general director of Biva indicated that the constant statements about the “song of the sirens” against competition in the stock market are “false and only seek to hold Biva responsible for the current complicated situation that the stock market is going through Mexican”.

The foregoing, given that in the Mexican stock market, at least 14 companies have decided to delist their shares in three years and since 2018 only one company has placed shares.

Some broadcasters that have decided to leave the Stock Market have been Grupo Lala, IEnova, Rassini, Bio Pappel and Maxcom. Companies such as Farmacia Benavides, Aeroméxico, Grupo Sanborns, Bachoco, Monex and Aleatica, Banco Santander México are still in the process of leaving the local stock market.

José Oriol Bosch said that “idle conversations have tended to create a fictitious and not very constructive ‘race’ about who will be the next to list a new company, an issue that is far from being resolved, much less contributing to the stock market culture and true development. of the stock market in the country.

Last week, the general director of the BMV explained that between January and August of this year, the daily amount traded was 21,610 million pesos, of which 19,546 million pesos were registered in the stock exchange he directs and the remaining 2,064 Millions of pesos were captured in Biva. As of August 22, when changes to the so-called best execution or “forced distribution” were operated, and until November 30, the daily amount traded fell to 18,093 million pesos in both places.

Best execution seeks to send share purchase orders to the Stock Exchange that offers the best price and volume conditions. This, it is argued, is to generate even competition.

Ariza said that the lack of liquidity and depth of the market “has more to do with the complex national and global context, with the lack of actions in the past to strengthen the development of the market in terms of improving supply, encouraging demand and being fiscally competitive, issues that we are managing to work with the authority (with the reform of the Securities Market Law)”.

judith.santiago@eleconomista.mx