Mexico City, Dec 30 – The Mexican Stock Exchange (BMV) obtained its best annual performance since 2010 in 2021 with a rise close to 20%, surpassing its historical maximums on more than 10 occasions, although it did so in middle of the exit of high-profile companies and a drought of initial public offerings (IPOs).

The result of this year, in the absence of two sessions to know the Price and Quotation Index (CPI) at the annual close on Friday, adds to the also positive performance of 2020, when it ended with an annual increase of 1.21% and a level of 44,066.88 points despite the volatility caused by the pandemic.

Just last Tuesday, the IPC reached a new historical maximum of 53,630.53 points during a moment of the day.
“During the year, the behavior of the CPI was driven by the economic recovery, which allowed companies to show results in the second quarter above expectations, leading the CPI to record new all-time highs,” explained Gabriela Siller, director of analysis. Economic of the Base Bank.

BUT IN THE MIDDLE OF DEPARTURES

Despite the performance, “Mexico’s capital market is facing a difficult situation,” Siller warned.

While in 2000 there were 172 companies listed on the BMV, now there are 144 companies, which implies a contraction of 16.28% in the last 20 years.
“The weakness of the Mexican stock market occurs in a context of uncertainty, which tends to alienate investors. This began with the cancellation of the Mexico City airport in 2018, which resulted in a downward trend change for the IPC, “Siller explained.

Among the companies that have announced or considered their departure are the Bio Pappel paper mill, the dairy Lala, the energy company IEnova, General Seguros, Maxcom Telecomunicaciones, and Fortaleza Materiales and Elementia Materiales, from the construction sector.

In particular, it shook the possible exit of Santander bank after the public acquisition offer (OPA) in which the Spanish parent company paid 340.7 million euros to increase its stake in the Mexican subsidiary from 91.64% to 96.16% .

“The offer does not contemplate the delisting part, it is a decision that our parent company will make. If they decide to delist, the reason is very valid, the reason is that I believe that the market is not recognizing the value we are having, ”argued Héctor Grisi, general director of Santander Mexico, in his year-end conference.

MEXICAN LAG

In addition, Mexico had four years without a new initial public offering, after the last one carried out by Grupo México Transportes in 2017.
“We have been four years without significant issues on the stock exchanges. We have a huge potential market,” lamented Marcos Martínez , Chairman of the BMV Group, at his closing press conference in 2021.

The leader of the exchange asked to improve conditions in 2022, including tax benefits and that the Mexican government streamline the procedures.
“We have not found in our country in 20 years a way to detonate that potential that Mexico has, the country lags behind in terms of how much its stock market is worth, compared to other Latin American countries, such as Brazil,” he observed.

THE PUSH

Despite the challenges, 27 of the 35 companies in the IPC closed in positive territory, highlighted Siller, from Banco Base.
The Grupo Bimbo bakery showed the best performance, while the station with the greatest decline was the mining company Industrias Peñoles (-29.95%), despite having gained 69.91% in 2020.

The analyst highlighted that the basic consumer sector, which represents the highest weighting of the index, 31.96%, showed a yield of 18.56%.
While the largest gains were concentrated in the consumer discretionary sector, which grew more than 32%, although it only represents only 1.29% of the CPI.

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