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Mexico’s BMV chief defends MILA entry

Jan 22, 2014

Despite low trading on Latin America’s integrated stock exchange, there is “more opportunity” as part of Mila, says Pedro Zorrilla, head of the Bolsa Mexicana de Valores


The director general of Mexico's stock exchange has defended the organization's move to join the integrated Latin American market, Mila, despite low trading on the platform and his Brazilian counterpart's decision to stay out.

     
     
   Pedro Zorrilla, BMV  
"As we become more efficient at attracting investors' attention through this market, we will have greater opportunities to deepen its operation," Pedro Zorrilla said in an interview in the January/February issue of LatinFinance.

"So, regardless of the starting point in terms of liquidity or depth, all the markets are advancing. There's more opportunity as part of Mila, than outside it."

Mexico's financial reform, approved by its Congress in November, opened the way for the exchange to join Mila. The integration will create Latin America's largest bourse by market capitalization, at over $1tn.

Still, trading across the three exchanges has been minimal since its inception. "The truth is that Mila hasn't traded much," says Jorge Errázuriz, managing partner at BTG Pactual Chile.

In October, less than $6 million of stock was sold across the platform. Buying and selling on Santiago's stock exchange alone was nearly three times the deal flow on Mila's infrastructure.

Brazil's BM&FBovespa considered merging with Mila but decided against it because of the disparity in scale. Nonetheless, the incorporation of Mexico will broaden Mila's scope, and encourage a greater flow of investment, says José Antonio Martínez, chief executive of the Santiago stock exchange.

"Mexico is the second largest market in Latin America after Brazil, which means it will bring to Mila greater liquidity, a larger number of participants and, of course, it will broaden the range of financing options for our issuers, trading options for our intermediaries, and the range of instruments for our investors," he said. LF

Read the full article: Regional Intergration: Mila - Thinking big



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