With less than a decade in operation, Mexico’s fastest-growing stock exchange, Bolsa Institucional de Valores (BIVA), entered the United States and Canada in November 2021.
By partnering with a global leader of trading infrastructure, BIVA now offers US and Canadian corporate investors market data and access to Mexican stocks.
Why did BIVA emerge in Mexico?
Before BIVA, the Bolsa Mexicana de Valores (BMV) was the country’s sole stock exchange—and the second largest in Latin America after Brazil’s B3 exchange. However, its capitalization was around 30 percent of Mexico’s gross domestic product (GDP), whereas the stock markets of other countries, such as Chile’s or Peru’s, reached 87 percent and 41 percent of GDP, respectively.
In 2013, financial services company CENCOR filed with Mexican authorities a request to create a new, more innovative stock exchange.
When BIVA finally secured all the permits and started operating on July 25, 2018, it became BMV’s first competitor in more than four decades. It debuted with 52 issuer companies—versus BMV’s 147—and a dynamic stock-exchange index that updated every six months.
BIVA’s purpose is to encourage more companies to engage in the stock market by implementing cutting-edge technology. Its strategy to outperform the incumbent BMV includes:
- New target: BIVA aims to serve medium-sized enterprises that were previously ineligible for BMV listing and products.
- Lower requirements: The minimum capital required is US$500 million, whereas BMV asks for over $3 billion. The stock exchange does not set a maximum number of firms to rank in its index, either.
- Cutting-edge technology: BIVA has allied with Nasdaq to provide a state-of-the-art listing and trading platform.
- More investment vehicles: BIVA offers more instruments than BMV, such as Real Estate Investment Trusts (REITs).
How is BIVA positioning itself in the international markets?
Since its inception, BIVA has built international alliances to boost its operations and scope. It has partnered with Nasdaq and FTSE Russell from the London Stock Exchange Group to boost its reputation and indexes. Nasdaq provides the technology—the Nasdaq X-stream Trading system—while FTSE Russell offers the insights and tools for exchange-traded funds (ETFs) and derivative contracts.
In August 2020, BIVA jumped on the environmental, social, and governance (ESG) bandwagon by joining the UN Sustainable Stock Exchanges (SSE) initiative. The SSE integrates 96 bourses whose work aligns with the UN Sustainable Development Goals.
Similarly, BIVA became part of Bloomberg’s initiative to create the Gender-Equality Index (GEI), which identifies public companies committed to supporting gender equality. The GEI includes 380 companies from 45 different countries, five of which are from Mexico.
BIVA’s expansion plans are ongoing. In particular, it is seeking other alliances to connect Mexican investors with international markets and foreign investors with Mexican firms. For instance, BIVA worked alongside London-based HSBC Global Asset Management to create an ETF allowing Mexican investors to access Chinese enterprises.
How is BIVA entering the US stock market?
Since October 26, 2021, Canadian and US investors and stock exchanges have had direct access to BIVA market data and connectivity through Options Technology’s GPoP, the largest investing data platform in North America.
With such an alliance, BIVA is playing in the big leagues. Founded in 1993, Options Technology provides high-performance trading infrastructure and cloud-based services to more than 200 firms worldwide, including leading global investment banks, hedge funds, private equity houses, and exchanges.
Micah Kroeze, Options Technology’s senior vice president, proudly commented, “BIVA’s GPoP infrastructure in Secaucus provides direct local connectivity and market data into the biggest equities trading hub in North America, and we are thrilled that several prominent funds have already signed up for direct BIVA access.”
How has BIVA performed thus far?
Currently, BIVA is the fastest-growing and the most technologically active stock exchange in Latin America. In 2019, the Mexican media outlet Expansión named BIVA the most innovative firm with less than 500 employees in Mexico.
Since its founding, BIVA has helped Mexican companies raise over $13.4 billion and has introduced around 15 new firms to the stock market.
However, Director María Ariza argues BIVA still struggles to loosen BMV’s grip and influence on Mexican capital markets.
BIVA, however, is outperforming competitors in global markets. It launched BIVA Cloud in 2021, making real-time information of the Mexican stock market globally available. BIVA also brought international stocks within reach of Mexican investors by listing alternatives from companies such as Airbnb, Miniso, Canadian Solar, Siemens, Didi Global, Mitsubishi, McCormick and Company, Duolingo, Xerox, and Wesco.
In 2021, BIVA listed 152 new equity instruments and two debt instruments. Its FTSE BIVA index posted 21.4 percent growth in 2021, the best year to date, according to Investing.com.