MEXICO CITY — Mexican investors will be able to buy shares in U.S. blue chip stocks from their home market starting Thursday, as the local exchange’s global market program gets under way.
Twenty-nine of the 30 issues that comprise the Dow Jones Industrial Average will join Citigroup Inc., which has traded locally since 2001 when the U.S. concern bought Mexican financial group Banamex Accival.
The program is being sponsored by Deutsche Bank, which will act as filing agent and custodian for the shares underlying the U.S. stock bought locally.
All brokerages can participate in trading the shares.
The shares will operate like reverse American Depositary Receipts, said Claudio Curtius, who heads the program at Deutsche Bank. Curtius said the bank has a similar program in Argentina, and is looking at the possibilities for listing U.S. stocks in Brazil. Attempts in the past to trade U.S. issues abroad, for example in Taiwan or Singapore, failed because of the lack of the sponsor, he said.
Curtius said the new Mexican listings represent “the tip of the iceberg” for trading overseas securities.
Mexican Stock Exchange spokesman Guillermo Medina said the BMV Global Market project contemplates adding securities from other markets in the future. He mentioned European equities and Mexican bonds issued abroad that aren’t available locally.
To begin with, the U.S. shares will be available only to institutional investors, but soon “qualified” individual investors will also be able to participate, Medina said.
The restrictions on qualified investors, who would have to meet certain stiff investment criteria to buy the U.S. stocks, will limit the initial scope of the program, said Francisco Rivero, equities strategist at SCH Investment.
Medina said the exchange is hopeful the availability of the U.S. stocks will contribute to higher operating volumes in the Mexican market.