Mexico : Capital Market Development

Securities markets in Mexico are orderly and relatively innovative; however, corporate markets lag behind those in comparator countries. The government bond market accounts for the bulk of the fixed-income segment, and is well developed and active. While financial savings rates have been growing, little has been transformed into long-term investments. Most of the savings remain in traditional savings accounts. Institutional investors still hold the bulk of their assets in government bonds. Mexico will need to find solutions to further develop its capital market to fund its development needs. In the infrastructure sector alone, the country needs approximately US$230 billion of new investments. In the corporate sector, provision of financing by banks fare well below peers, especially for small and medium enterprises. Meanwhile, the pension fund industry, growing at about US$20-US$30 billion annually, requires sound investment outlets. The large concentration in the control of financial intermediaries raises complex issues and may stunt market development. The investor base in the equity market lacks diversity, with limited development of the retail segment. Mutual funds could play a key role in mobilizing long-term finance. Most funds are used by banks as alternative ways of tapping clients' savings. Mutual funds (particularly open ones) are much more sensitive to liquidity risks than institutional investors with long-term horizon. The independent distribution vehicle created under the 2002 reform has not been very successful in fostering sustainable entry. Restrictions placed on institutional investors limiting investment to only publicly offered securities keep them away from more specialized investments.

Bibliographic Details

Main Authors:	International Monetary Fund, World Bank
Language:	English en_US
Published:	World Bank, Washington, DC 2013-03
Subjects:	ACCESS TO BANK, ACCOUNTING, ASSET CLASS, ASSET CLASSES, ASSET MANAGEMENT, ASSET VALUE, AUCTIONS, BACKED SECURITIES, BANK CREDIT, BANK DEBT, BANK FINANCING, BANK LENDING, BANKING CRISIS, BANKING SECTORS, BOND, BOND INDEX, BOND ISSUANCES, BOND MARKET, BOND MARKETS, BONDS, BROKERAGE, BROKERAGE ACTIVITIES, BROKERS, CAPITAL MARKET, CAPITAL MARKET DEVELOPMENT, CAPITAL MARKETS, CASH MARKET, CENTRAL BANK, CENTRAL SECURITIES DEPOSITORY, COLLATERAL, COMMERCIAL BANKS, COMPOSITION OF GOVERNMENT DEBT, CONFLICT OF INTEREST, CONFLICTS OF INTEREST, CONSUMER LOANS, CORPORATE BOND, CORPORATE BONDS, CORPORATE DEBT, CORPORATE DEBT SECURITIES, CORPORATE GOVERNANCE, CORPORATE MARKETS, CREDIT INSTITUTIONS, CREDIT RATINGS, CREDIT SOURCES, DEBT COMPOSITION, DEBT INSTRUMENTS, DEBT ISSUERS, DEBT MANAGEMENT POLICIES, DEBT MARKETS, DEBT SECURITIES, DEPOSIT, DERIVATIVES, DERIVATIVES MARKET, DEVELOPMENT BANK, DIRECT INVESTMENT, DIRECT INVESTMENTS, DOMESTIC DEBT, DOMESTIC INSTITUTIONAL INVESTORS, DOMESTIC MARKET, DOMESTIC MARKETS, DUE DILIGENCE, EMERGING MARKET, EMERGING MARKETS, EQUITIES, EQUITY FUNDS, EQUITY INDEX, EQUITY INVESTMENT, EQUITY INVESTMENTS, EQUITY MARKET, EQUITY MARKETS, EQUITY SECURITIES, EXTERNAL DEBT, FINANCIAL CRISIS, FINANCIAL INSTITUTIONS, FINANCIAL MARKET, FINANCIAL SAVINGS, FINANCIAL SECTOR DEVELOPMENT, FINANCIAL SYSTEM, FINANCING REQUIREMENTS, FOREIGN EQUITIES, FOREIGN INVESTORS, FUTURES, FUTURES EXCHANGE, GOVERNMENT BOND, GOVERNMENT BOND MARKET, GOVERNMENT BONDS, GOVERNMENT DEBT, GOVERNMENT DEBT MARKET, GOVERNMENT DEBT SECURITIES, GOVERNMENT SECURITIES, GROSS DOMESTIC PRODUCT, GROSS SETTLEMENT SYSTEM, HOLDING, HOLDINGS, HOUSING FINANCE, INCOME INSTRUMENTS, INDEXED BONDS, INFLATION, INFRASTRUCTURE FINANCING, INFRASTRUCTURE INVESTMENT, INITIAL PUBLIC OFFERING, INITIAL PUBLIC OFFERINGS, INSTITUTIONAL INVESTORS, INSURANCE, INSURANCE COMPANIES, INSURANCE PENETRATION, INTEREST RATE, INTEREST RATE SWAPS, INTERNATIONAL DEBT, INTERNATIONAL FINANCIAL MARKETS, INVESTING, INVESTMENT BANKS, INVESTMENT BEHAVIOR, INVESTMENT FUNDS, INVESTMENT OUTLETS, INVESTMENT PORTFOLIO, INVESTMENT REGIME, INVESTMENT STRATEGIES, INVESTOR BASE, INVESTOR PROTECTION, IPO, ISSUANCE, ISSUER OF DEBT, LACK OF TRANSPARENCY, LEGAL FRAMEWORK, LIQUID INSTRUMENTS, LIQUIDITY, LIQUIDITY RISKS, LOAN, LOCAL MARKET, LONG-TERM FINANCE, LONG-TERM INTEREST, LONG-TERM INTEREST RATES, LONG-TERM INVESTMENTS, MARK TO MARKET, MARKET ACCESS, MARKET BENCHMARKS, MARKET EQUITY, MARKET INFRASTRUCTURE, MARKET PARTICIPANTS, MARKET PLAYERS, MARKET PRICE, MARKET SHARE, MATURITIES, MATURITY, MONETARY FUND, MONETARY POLICY, MORTGAGE, MORTGAGE-BACKED SECURITIES, MORTGAGES, MUTUAL FUND, MUTUAL FUND ASSET, MUTUAL FUND ASSETS, MUTUAL FUND INDUSTRY, MUTUAL FUND INVESTMENTS, MUTUAL FUND MANAGERS, MUTUAL FUNDS, NOMINAL YIELD, OUTSTANDING AMOUNT, OUTSTANDING DEBT, PENSION, PENSION FUND, PENSION FUND INVESTMENTS, PENSION FUNDS, PORTFOLIO, PORTFOLIO DIVERSIFICATION, POTENTIAL INVESTORS, PRIMARY DEALER, PRIMARY DEALER SYSTEM, PRIMARY DEALERS, PRIMARY MARKET, PRIMARY MARKETS, PRIVATE CREDIT, PRIVATE DEBT, PRIVATE EQUITY, PRIVATE INVESTMENTS, PRIVATE LENDERS, PROFESSIONAL INVESTORS, PUBLIC DEBT, PUBLIC DEBT MANAGEMENT, PUBLIC DEBT MARKET, PUBLIC DEBT SECURITIES, PUBLIC MARKET, PUBLIC MARKETS, QUOTATION SYSTEM, REAL ESTATE INVESTMENT, REGULATORY CONSTRAINTS, REGULATORY FRAMEWORK, RETAIL INVESTORS, RETURN, RISK AVERSION, SAVINGS ACCOUNTS, SAVINGS RATES, SECONDARY MARKET, SECONDARY MARKETS, SECURITIES, SECURITIES DEALERS, SECURITIES MARKET, SECURITIES MARKETS, SETTLEMENT, SHORT-TERM DEBT, SHORT-TERM DEBTS, STOCK EXCHANGE, STOCK MARKET, STOCK MARKET CAPITALIZATION, STOCK MARKETS, STOCKS, SUBORDINATED DEBT, TOTAL DEBT, TRADING, TREASURY, TREASURY BILLS, TREASURY BONDS, TURNOVER, UNDERWRITERS, VALUATION, YIELD CURVE,
Online Access:	http://documents.worldbank.org/curated/en/2013/03/18606007/mexico-capital-market-development-technical-note https://hdl.handle.net/10986/16747
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