With the economy recovering from the recession incurred by the peso devaluation, Mexican companies are poised to sell between $1 billion and $3 billion in equity to overseas investors in the next 12 months. After two years of stagnation, observers expect renewed domestic consumption in 1997 to revive expansion projects placed on the backburner since the 1994 crisis. If the markets are adequately bullish, more companies will feel comfortable enough to issue equity as a cheap way to retire expensive debt.
"People are feeling more comfortable with Mexico, and they're looking at a lot of different sectors now," says an equity analyst at Salomon Brothers in Mexico. The peso crisis killed the long equity pipeline which developed in the heady days following the passage of the North American Free Trade Agreement. As a result, only two companies dared to issue equity in 1995: the Corporacion Interamericana de Entreniemiento in the domestic intermediary market and steel company Alto Hornos de Mexico (Ahmsa), which privately placed stock among international investors. Last year 23 Mexican companies issued equity in the domestic and international markets. Most of these issues were small offerings on the Mexican Stock Exchange, the BMV.