AMLO will use the stock market to finance projects

Abel Hibert, an economic adviser to Andrés Manuel López Obrador, explained that they are analyzing the best schemes to be able to achieve works such as the Mayan Train, the Transisthmian Corridor, two new refineries and the New Mexico Airport, among others.

Notimex.- The government that will take office on December 1 does not have all the money necessary to carry out the infrastructure projects that the country needs, so it will rely on the private sector and go to the stock market to attract capital domestic and foreign.

This was stated by Abel Hibert, economic adviser to President-elect Andrés Manuel López Obrador, explaining that they are analyzing the best schemes to achieve works such as the Mayan Train, the Transisthmian Corridor, two new refineries and the New Mexico Airport, among others.

“What you are looking for are resources, the government obviously does not have them, has a very limited budget, there are many needs and you have to look for these mechanisms, instruments that can be carried out,” he noted.

And where is the money? Well you have to use the market so you can carry out the works, he said in an interview. It is good that AMLO will resort to the stock market.

After highlighting that there will be a “budget surgery” very important in the next six years, he stressed that they will also use the assets that the government already has and generate income such as roads and others, to raise resources in the market which would lead to the use of instruments such as the Investment Trusts in Energy and Infrastructure (Fibras E).

“The important thing is not who owns the property (of the resources) but, for example, that the Mayan Train that works, that gives service, that has a regional impact in the Yucatan Peninsula”, highlighted Hibert.

In this regard, the directors of the Mexican Stock Exchange (BMV) and Institutional Securities (BIVA), applauded this decision, because it recognizes the importance and contribution of the markets, and assured that they will support the next government in this objective.

The general director of the BMV, José Oriol Bosch, commented that in the stock market there is a huge amount of resources that the new administration could take advantage of and this could multiply in an important way in the coming years.

In a separate interview, he said that only the Retirement Fund Administrators (Afores) have resources for three trillion pesos of assets invested and are expected to double in the next five to seven years.

He specified that of those three trillion pesos, about 1.5 trillion pesos are invested in debt that could be placed in alternative instruments to finance infrastructure projects.

“Aside, if we saw that the external investors put the equivalent (in money) a two to one, the amount that would be would be huge. There could be 500 billion dollars in the next five to seven years, it would be a very large amount to be able to continue investing in this type of projects, “he said.

Meanwhile, the general director of BIVA, Maria Ariza, applauded in turn that “the next government has so clear the benefits of public markets, so clear the transparency that should be adopted by government institutions.”

The Director of Operations of BIVA, Rodrigo Velasco, commented that “the stock market is always going to be a very interesting option to finance this type of projects and we definitely see its viability both on the capital side and on the Fibras side”.

Source: Notimex, Forbes

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