|
|
A Slow Flow for Mexico Pension Plan
The Associated Press
April 21, 2005
It has been three months since regulatory changes allowed millions of Mexicans to pour part of the nearly $45 billion in pension assets into the country's surging stock market. But few have done so, although the Bolsa Mexicana de Valores was the world's strongest major stock market last year and continued to reach records through early March.
Pension fund managers initially were staying out because they felt the market had become overpriced by speculation that their money would spur a rally. And since the rally ended in March, many have been sitting out the downturn, waiting for a period of stability.
Pedro Zorrilla, the adjunct general director of the stock market, called pension fund investments so far an important flow of capital into the market. But he added, "One also would have supposed the investment would be even higher."
Mexico's pensions are mainly held in individual retirement accounts called Afores, for Administradores de Fondos para el Retiro, or retirement fund administrators. The accounts are funded by employee contributions matched by employers. They control close to $45 billion in assets, managed by banks and insurance companies as well as one large government pension operator.
In years past, fund managers could invest mainly in government bonds. But starting on Jan. 17, managers were allowed to funnel 15 percent of workers' pension portfolios into stock markets here and in the United States, Europe and Asia.
Traders preparing for a market flush with pension-fund capital bought shares late last year, pushing the Bolsa Mexicana so high that many Afores managers chose to stay on the sidelines. To date, Afores have snapped up about $350 million in Mexican stocks - but now it is the opposite problem that has kept them from buying more.
After rising 47 percent last year, the Bolsa Mexicana has fallen every week since closing at a record high of 13,877 points on March 7. A 12 percent decline was triggered largely by rising U.S. interest rates and sharp drops in other Latin American exchanges.
"A lot of managers are waiting for a better time to start Afores in the market," said Jesús Viveros, an analyst at the Mexico City-based consulting firm Bursamétrica.
|
|
