American Depository Receipts (ADR) Boost Returns for Mexican Firms
Mexican companies listed on the New York Stock Exchange (NYSE) through American Depository Receipts (ADR) are experiencing higher returns in 2025 compared to the Mexican Stock Exchange (BMV).
What are American Depository Receipts (ADR)?
An ADR is a security that represents ownership in the shares of a foreign corporation and is traded on an American stock exchange, such as the NYSE. It allows non-US companies to raise capital in the US market using dollars.
Key Mexican Companies with ADR
- Industrias Peñoles
- Grupo Televisa
- América Móvil (AMX)
- Grupo Aeroportuario del Sureste (Asur)
- Cemex
- Coca-Cola FEMSA (KOF)
- Fomento Económico Mexicano (FEMSA)
- Grupo Aeroportuario del Centro Norte (OMA)
- Grupo Aeroportuario del Pacífico (GAP)
- Pinfra
- Grupo México
- Bimbo
Reasons for Higher Returns
Jacobo Rodríguez, an analyst at Roga Capital, explains that issuing ADR is a strategy to expand global presence and make it easier for foreign investors to purchase shares, thus meeting international market demand.
He adds that while Cemex, Televisa, and Peñoles have performed well in pesos, their performance is even better in the US market due to dollar appreciation. “The appreciation benefits the performance of Mexican assets when measured in dollars,” Rodríguez says.
Besides the weakening dollar, Mexico’s strong financial position also contributes to the peso’s strength compared to other emerging market currencies.
Better Numbers
While the peso has appreciated by 10.26%, reaching 18.7402, the dollar has retreated against stronger currencies.
- Peñoles ADRs have surged 191.16%, while in the Mexican market, they’ve risen by 160.23%.
- Grupo Televisa, a media company, has seen its ADRs jump 69.05%, compared to a 54.12% increase on the BMV.
- Cemex ADRs have risen 63.74%, while its shares on the Mexican market have gained 48.46%.
- Pinfra’s ADRs have increased by 54.24%, while its shares in the national market have risen by 38.81%.
- Grupo Aeroportuario del Centro Norte (OMA) and Grupo Aeroportuario del Pacífico (GAP) ADRs have also gained, with 50.32% and 41.19%, respectively, while their shares in the national market have risen by 34.41% and 26.21%, respectively.
Positive Outlook
The outlook for the future is optimistic, expecting better economic performance to boost the value of companies in both local and US markets.
“We anticipate that Mexico’s economic activity will rebound during the second half of the year, following a relatively weak first half. This upturn should directly benefit companies listed in the stock market,” says Jacobo Rodríguez.
Georgina Muñiz Sánchez, an analyst at Vector, cautions that there will be cautiousness on the BMV due to the fragility of external stock markets. “We should not lose sight of the 59,000 units barrier of the IPC; if it falls below this level again, there could be a significant correction,” she warns.
Bolsa Mexicana de Valores to Launch Options for US Equities
The main Mexican stock exchange operator plans to list options on major US-traded companies like Amazon, Apple, and others by the end of the year, according to its CEO Jorge Alegría.
Grupo Bolsa Mexicana de Valores will introduce options on internationally traded stocks preferred by Mexican retail investors, starting with large US tech companies, Alegría said in an interview.
These options will be traded, settled, and guaranteed in pesos, complementing the cash trading of foreign shares locally.
“We are investing in technology to enable a more active options market for stocks in Mexico,” Alegría said.
Alegría took on the role last year with the task of increasing liquidity in a declining exchange and revitalizing operations, as several major names have left in recent years.
The stock exchange operator expects a rebound in small and medium-sized company valuations through special purpose acquisition companies (SPACs).
Mexico has its own investment instruments that trade on the exchange, called CKDs (Capital Development Certificates) or CERPIs (Investment Project Certificates), and largely operate infrastructure trusts managed by administrators like Mexico Infrastructure Partners, Credit Suisse, and BlackRock.
Alegría hopes that the simplified listing rules in Mexico will help more medium-sized companies go public in the short term, with the first agreement under the new framework expected by year-end.
By the end of 2023, Mexico introduced new listing rules to make it easier for small companies to seek stock market listings and allow BMV-listed companies to pursue follow-on offerings and debt issuances.
These new regulations were part of a radical effort to revitalize Mexico’s capital markets, which have struggled to attract major IPOs in recent years.
Last year, local retail firm BBB Foods opted to list on US stock exchanges instead of launching an IPO in Mexico to take advantage of higher valuations, according to Reuters.
