Bolsa Mexicana de Valores SAB, the operator of Mexico’s securities exchange, will consider joining the Chilean, Colombian and Peruvian bourses in Latin America’s first stock market combination.
Bolsa Mexicana will sign on Dec. 4 a letter of intent to study its entry into the market known as Mila that began cross-border transactions on May 30, according to an e-mailed response to questions from the Santiago exchange’s external public relations representative. The statement confirms an article published today in Santiago-based newspaper El Mercurio.
“The addition of Mexico would be a game changer,” Fernando Romero, chairman of Lima-based investment fund NF&C Inversiones SA, said in an interview in Cuzco, Peru. “Not only will it provide market depth for trading volume, it will also spur initial public offerings.”
Colombia, Peru and Chile are developing the region’s first market combination, while financial firms integrate and expand, as economic growth spurs demand for securities. Banco de Credito del Peru, the country’s biggest bank, will buy 51 percent of Colombia’s Correval SA in an agreement announced yesterday.
Bolsa Mexicana plans to sign the agreement as the presidents of Mexico, Chile and Colombia meet in Merida, Mexico, for the second summit of the so-called Arco Pacifico Latinoamericano.
The exchange, based in Mexico City, said in an Oct. 13 statement that it was considering linking operations with Mila. Juan Pablo Cordoba, head of Colombia’s main bourse, declined to comment on Mexico’s interest in joining the integrated market.
Mila had eight transactions in November, of which seven were in Chilean stocks, according to data posted on the website of the Santiago exchange. Total volume reached $68,058, down from $702,171 in October.
“The incorporation of the Mexican exchange and higher investor confidence may boost the number of transactions next year as concern for developed markets dissipates and interest in emerging markets increases,” the brokerage unit of Banco de Credito & Inversiones wrote in an e-mailed note.
Chilean, Colombian and Peruvian stocks have a combined value of $549 billion, surpassing Mexico’s $420 billion, according to data compiled by Bloomberg. Brazil’s BM&F Bovespa has a market value of $1.24 trillion.
Bolsa Mexicana closed today unchanged at 23.28 pesos. The shares have declined 10 percent this year.