It Just takes Time

What is the importance of Fibra-E, and how has it performed over the past year?

It is important. One of the reasons we have not had any Fibra-E on the market yet is that, when the regulations were created, many people thought they would be similar to those of other Fibras, especially fiscally, which they were not. It took several months for many investors, companies, and brokerage firms to be convinced that certain modifications should be made to the way that Fibra-E works on the fiscal side. While they did change it, too many crucial months passed, during which it was not attractive for many companies to implement a project within Fibra. Now, the situation is different: companies are on board, and we want to have the first project in October. This is important because there are many projects, especially the one with Pemex. Since they need resources, Fibra-E is a good way for them to get some projects off the ground that will bring in funds. Once it is on the market, we will be able to understand and modify it. Despite the Trump issue, volatility is not always bad—and just this week we have a new IPO issue. Grupo Cuervo will also go on the market in 2016. Many companies want to make an IPO, but are affected by the current volatility.

What would you say is the biggest challenge facing Mexico right now?

The reforms driven by the president are huge, but the benefits will not be felt tomorrow. Many thought a magic wand would induce thousands of companies to invest here immediately. While this was wildly overoptimistic, the reforms are still good. But they are profound and will take time to be implemented. Since everything is relative, investors are not that afraid. Mexico was recently ranked 51st in terms of the best country in which to do business, which is still terrible since we are much larger than the 51st economy in the world, so we certainly have work to do. Transparency and corruption are still major issues keeping us back. There is also depreciation, though we are working in the right direction, and Mexico is growing while many other countries are not. We will have elections two years from now, which will create a situation similar to that all over the world. Thus, while we are much better off than some and worse off than others, I am still optimistic about this country. We got the reforms that were needed, the effects of which will be profound and last long into the future.

What is the importance of MILA for Mexico?

MILA is something that was created before by Peru, Chile, and Colombia, and Mexico joined two years ago as these four countries combined significantly increased the total market GDP that our companies would now have access to. When investors go to another country in Latin America and buy shares, it is a challenge. Many do so through accounts in New York or Miami. Since the other three member countries are less developed, it made sense for them to band together to have access to one larger market. Our expectations were positive, though we knew from the beginning that it was going to take time and people were going to have to get used to it. The stockbrokers would also have to promote its sale on the stock exchange, which is not our responsibility; hence, there were some delays in getting off the ground. Yet at least one firm that listed with MILA in 2016 had a successful IPO. Thus, it is unfortunate that so few IPOs happen in the region, but they have also recently been low in the US. Eventually, we would also like to issue debt in addition to shares to firms that can sell that debt to MILA. Overall, the outlook is positive.