At the end of October, the Brazilian stock exchange had listed a record 147 IPOs in 2007. In contrast, the Mexican market has had one new listing all year. In April, Banco Compartamos did a $466 million listing and became one of 133 companies on the exchange.
Several explanations for the exchange’s poor performance, when compared with Brazil, have been given. "Mexico has been investment grade for a while, the markets have been open for years, the cost of debt is pretty low and the companies, in general, are reasonably well capitalized," says Antonio Quintella, country head of Credit Suisse in Brazil. "The IPO market in Brazil was [inaccessible] for many years. The Brazilian economy is now growing at a faster pace; the local companies have significant opportunities and need equity capital to invest."
Eduardo Cepeda, country head of Mexico at JPMorgan, says: "Mexican issuers are more mature and have been capitalized well for a long time. Since the crisis in 1995-96 the corporates moved to maintain a very conservative capital structure. Doing an equity deal for the sake of it is not a high priority."
In the past 12 months there has been a renewed drive to lure companies onto the exchange.