Your Mexican Portfolio
By Héctor Morales Ortiz August 1, 2008 San Miguel de Allende
About the Mexican stock market
There are only 150 public companies in Mexico and the 35 largest of them form the IPC (Indice de Precios y Cotizaciones) which is the most important market index in Mexico.
Three ways to invest in this index are:
1. ETF that can be traded worldwide through ishares (EWW).
2. ETF that can be traded in Mexico under the ticker NAFTRAC.
3. Mutual funds that can be bought and sold at the closing price of the market. In Actinver-Lloyd we have ACTIVAR which was formerly AWLLOYD.
The returns from this index in the last years have been:
Year Return
1997 8,12%
1998 -24,28%
1999 78,75%
2000 -20,73%
2001 12,74%
2002 -3,85%
2003 43,55%
2004 46,87%
2005 37,81%
2006 48,56%
2007 11,68%
2008 -7,00%*
· Up to July 24/2008
From 1997 to 2007, the total return for the Mexican stock market is close to 240 percent without taking into consideration the compound interest.
The IPC’s highest point ever was close to 32,500 points last October and Friday, July 25, it was around 27,000 points, which represents almost a 20-percent discount from the all-time high.
It is also important to mention that all capital gains in the stock market in Mexico are tax free. This is to stimulate people’s interest in the markets because, as I mentioned before, the stock market in Mexico is quite small.
I am quite sure the volatility of the markets is going to continue; but are we at the bottom yet or is there more depth to the abyss?
To end up I just want to let you know that the overnight rate in Mexico in pesos went up and is now 8 percent, as are the 28-day CETES T-bills. In my last column, the rate was 7.75 percent.
For more information, visit Bolsa Mexicana de Valores at www.bmv.com.mx
(click on the topmost bar for English text, including graphs and charts) or www.actinver.com.mx
(click for English text).
Hector Morales Ortiz is the manager of the brokerage department of Actinver-Lloyd in San Miguel. Contact him at
hmoraleso@actinver.com.mx.
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