Cryptocurrencies, the New Player in Investment Market

Between 500,000 and 600,000 people invest in cryptocurrencies in Mexico compared with around 300,000 investors in the Bolsa Mexicana de Valores (BMV), which is not even 1 percent of the country’s adult population, said José Oriol Bosch, CEO of BMV Group, at Mexico Business Forum 2018 on Wednesday at Mexico City’s Sheraton Maria Isabel Hotel. This represents a small market compared to the US, where, according to Bosch, “50 percent of the adult population invests in one way or another in the capital markets.”

However, the number of investors in cryptocurrencies does not concern Bosch. “We do not compete with cryptocurrencies; we focus on financing new companies or projects that generate growth for the economy. We are concerned about the small number of investors we have in the Mexican Stock Exchange, not the number of investors in cryptocurrencies,” he said.

One of the keys to economic growth, Bosch pointed out, is the confidence generated by a country because “if there is trust, there are better terms for the market, there is greater initiative and improved internal and external relations. In addition, it creates a better environment to face adverse situations,” he said.

With concerns swirling around the ongoing renegotiation of the NAFTA treaty, Bosch reminded the audience during his presentation, “Mexican Business and the Challenge of Reshaping Global Perceptions,” that Mexico is the 15th-largest economy in the world and the second-biggest in Latin America, behind Brazil. Despite the global and regional economic uncertainty, the country is “above the global average in terms of business confidence,” he said. “Mexico’s growth expectations are very good and will not change in the coming months. These expectations are based on issues such as demographics and geography, as well as free trade agreements with other countries and regions,” he said.

However, Bosch warned that a loss of confidence could lead to “a very dangerous cycle that we already underwent in Mexico at the end of the 1990s.” He gave the example of Argentina, where in recent weeks investor confidence has tumbled, with the Argentine peso plummeting to an all-time low on May 3. “It is true that Mexico has been dependent on NAFTA, but that is changing,” he said, adding that the country is taking advantage of the markets with which it already has agreements, as well as looking for new destinations. “To these factors, we should add the confidence generated by the structural reforms approved during this sexennium and the creation of the Special Economic Zones (ZEEs), designed to close the gap between the economies of the northern and southern states.”

The goal of the BMV Group, which itself is listed on the BMV, is “to finance companies that need resources in order to grow the economy,” Bosch said. “Mexico has 5 million companies but 99 percent are micro, small and médium-sized; however, the remaining 1 percent is responsible for 80 percent of total production. This is a window of opportunity for the country,” he said