Bolsa Mexicana de Valores SAB de CV Class A ((MX:BOLSAA)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call from Bolsa Mexicana de Valores SAB de CV Class A revealed a balanced sentiment, highlighting both positive strides and existing challenges. The company is making significant strategic investments, notably in new IPOs and technological advancements, which are promising for future growth. However, the current financial metrics indicate a mixed performance, with some areas showing strength and others raising concerns.
New IPOs and Equity Market Activity
The company announced the confirmation of two new IPOs, Aeromexico and Esentia Energy Systems, set to list before the end of the year. This development signals a renewed interest from market participants and could invigorate the equity market activity, reflecting positively on the company’s strategic direction.
Bond CCP Regulatory Approval
A significant milestone was achieved with the regulatory approval for the bond CCP to operate as a central counterparty for Mexican government bonds. This approval marks a transformative step for the fixed income market in Mexico, aiming to enhance liquidity efficiency and reduce counterparty risk.
Technological Advancements and NASDAQ Partnership
Bolsa Mexicana de Valores has entered into a strategic agreement with NASDAQ to upgrade its MexDer platforms. The plan is to launch a fully integrated derivatives platform by 2026 and cloud-based platforms by 2027, which could significantly modernize their operations.
Revenue and EBITDA Growth
The company reported a total revenue of MXN 1.1 billion, marking a 4% increase year-over-year. EBITDA also saw a rise to MXN 623 million, up 2% from the previous year, with an EBITDA margin of 57%, showcasing some financial resilience.
Derivatives Market Growth
There was notable growth in the derivatives segment, with the average daily notional value of total futures increasing by 70% and open interest doubling compared to the previous year. This indicates a robust performance in this segment.
Net Income Decline
Despite positive revenue figures, net income declined by 4%, amounting to MXN 393 million. This was primarily due to recent interest rate cuts by Banxico, highlighting a challenge in maintaining net income growth.
Operating Expenses Outpacing Revenue Growth
Operating expenses increased by 8% to MXN 543 million, driven by higher costs in marketing, technology, and personnel. This outpaced the revenue growth, indicating a need for cost management.
SIF ICAP’s OTC Trading Revenue Decrease
SIF ICAP’s OTC trading revenues saw a 6% decrease in Q3 ’25, attributed to lower market activity in both Mexico and Chile, which could be a point of concern for the company.
Challenges with FX and Interest Rates
The company is exploring hedging alternatives due to the strong growth of the peso and potential interest rate cuts, which could impact financial income. This reflects ongoing challenges in managing external economic factors.
Forward-Looking Guidance
Looking ahead, the company has outlined several initiatives and expectations. The two new IPOs are expected to boost market activity, while the bond CCP’s operation is anticipated to enhance liquidity and efficiency. The dual listing of the S&P IPC index future is set to increase Mexican equity exposure. Technological advancements, including a partnership with NASDAQ, are expected to drive future growth. Despite a decline in net income, the company anticipates significant investments in technology and future revenue growth from the CCP and data products starting in 2027.
In conclusion, Bolsa Mexicana de Valores SAB de CV Class A’s earnings call reflects a company in transition, balancing between strategic growth initiatives and current financial challenges. While there are promising developments on the horizon, particularly in technology and market activity, the company must address its net income decline and rising operating expenses to sustain long-term growth.