Mexican Stock Market Stagnates During AMLO’s Presidency

The Mexican stock market experienced minimal growth during Andrés Manuel López Obrador’s six-year term. No new companies joined the market, while several existing ones were delisted.

This stagnation contrasted sharply with the record-breaking performance of major U.S. indices. The Institutional Stock Exchange (BIVA) launched with ambitious plans just before AMLO’s presidency began.

However, these plans failed to materialize as the market struggled to gain momentum. Amin Vera, financial director at Invala Family Office, noted that the Mexican stock market lagged behind its international counterparts.

Miguel Cabrera, an analyst at Signum Research, highlighted the absence of Initial Public Offerings (IPOs) during this period. He attributed this to Mexico’s sluggish economy, decreased private investment, and low GDP growth.

The economy grew by only 0.8% during AMLO‘s term, one of the lowest rates in recent administrations. Companies postponed capital issuances due to unfavorable conditions, waiting for a more stable environment.

Diego Albuja, an analyst at ATFX, cited a lack of incentives and economic uncertainty as factors deterring businesses from entering the stock market.

Several companies, including Aeroméxico and Grupo Lala, chose to delist due to low valuations and insufficient liquidity. Despite these challenges, some sectors managed to thrive.

Mexican Stock Market Performance

The financial sector benefited from high interest rates, with companies like Inbursa and Banorte seeing significant gains. The insurance sector also performed well, with Quálitas’ shares increasing by 250%.

Overall, the Mexican Stock Exchange (BMV) closed the six-year term with a 3.4% return. While positive, this paled in comparison to the performance of U.S. markets.

The Dow Jones, S&P 500, and Nasdaq saw gains of 63.9%, 106%, and 144%, respectively, during the same period. Thirteen companies were delisted from the Mexican stock exchange during AMLO’s presidency.

Many cited low valuations and poor liquidity as reasons for their departure. Several others have announced plans to follow suit.

In December 2023, a new Securities Market and Investment Funds Law was published. This legislation aims to boost competition and simplify access for small and medium-sized enterprises.

Additionally, it seeks to create new investment instruments. While its impact remains to be seen, it represents a potential new direction for Mexico’s stock market.