Mexico Bolsa's CEO Sees Steady IPO Stream In 2011

Mexico may end the year with as many as 10 initial public share offerings and the country is likely to see just as many new placements next year as demand from local institutional and foreign investors remains strong, the chief executive of Bolsa Mexicana de Valores SAB (BOLSA.MX) said Thursday.

The company, which operates Mexico's equity and derivatives exchanges, expects one or two companies from the health-care sector to offer stock, as well as a string of companies that service state-run oil giant Petroleos Mexicanos, or Pemex, Luis Tellez said in an interview in New York.

Tellez also said he doesn't see the new link-up between the Peruvian, Chilean and Colombian stock exchanges as a competitive threat, but rather may look at pursuing ventures with each of them.

The Mexican exchange, which is the second largest in Latin America after Brazil's Bovespa exchange, marked its eighth IPO late Wednesday as the Mexican unit of Spanish construction concern Obrascon Huarte Lain (OHL.MC) priced its shares at 25 pesos ($2.04) in a MXN9.7 billion offering.

In addition to this year's eight IPOs, the exchange has also seen the placement of eight private-equity infrastructure income trusts, for a combined total of $4 billion of offerings.

Officials said Thursday they expect a steady number of companies to come to market in the following year, partly thanks to ample liquidity as a result of loose monetary policy in the U.S. and other parts of the developed world.

"This Spanish company decided to place their Mexican assets as a pure play in the Mexican market and it's my impression that other companies that service Pemex and are involved in other activities in Mexico will eventually come to the market as a pure play," Tellez said.

He added that Mexico could see its first real-estate investment trust listed on the exchange "in the next three weeks if it's going to be placed this year." The REIT transaction is likely to be worth around $400 million, he said.

"There is huge potential for real estate," Tellez noted.

Earlier this year, CME Group Inc. (CME) agreed to buy a 1.9% equity stake in BMV. The companies plan to expand the pact to link orders between the two markets and contracts from the BMV-controlled Mexican Derivatives Exchange, or MexDer, will be added to CME's Globex trading platform in 2011.

Others in the region have also been pursuing cross-border partnerships. Peru, Chile and Colombia will be creating the first integrated exchange in the region, which is slated to be completed by the end of January.

Tellez played down any potential increase in competition due to the partnership, saying "we don't compete for the same companies and we have different investors."

"Eventually we might do something with these countries, too," he said.

BMV has been in talks with Chile over a partnership but Tellez said that a recently established withholding tax imposed by Chilean officials on trading outside of the Andean country "stopped our agreement."

Still, the CEO said he was confident that the deal "will go through eventually."

-Kejal Vyas, Dow Jones Newswires; 212 416 2185; kejal.vyas@dowjones.com

(Anjali Cordeiro and Brendan Conway contributed to this article.)

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