Flag carrier Aeroméxico was not the best advertisement this year for Mexico’s stock market. The airline’s share price hurtled towards the ground at dizzying speed in March, prior to a recapitalization as it emerged from a Chapter 11 bankruptcy restructuring which all but wiped out smaller shareholders.
A newly rejuvenated Aeroméxico now intends to invest $5bn and expand its fleet. But its recovery plans do not include Mexico’s stock exchange. The airline is to delist in its home country and try its luck on the US stock market instead. It is not alone: Mexico’s bourse had more delistings than new offerings in 2021.
The country’s biggest dairy company Grupo Lala and its number two bank Santander México were among the departures. “Given the lack of investors on the Mexican market, some kind of partnership with the big liquid US exchanges is the way to go for the local market,” says Martin Werner, a former co-head of Goldman Sachs investment banking business in Latin America.
Mexico’s stock market woes point to a wider regional problem: most of Latin America’s bourses are withering and only Brazil has bucked the trend. Hyperinflation and Chavista economics destroyed Venezuela’s bourse years ago.
Along the Andes, the exchanges of Colombia, Chile, and Peru are huddling together in a merger, hoping to boost liquidity and make themselves more attractive to companies seeking capital.
Source: Financial Times