Jorge Alegria is the chief executive officer at the Mexican Derivatives Exchange (MexDer). He has 24 years of experience in the financial sector and was previously the CEO of ABN Amro in Mexico. He’s is a member of the board of directors of the International Options Markets Association (IOMA), a subsidiary of the World Federation of Exchanges, and will succeed Hugh Freedberg as IOMA Chairman. Alegria sat down for a Five Minute Interview with JLN’s Jessica Titlebaum to discuss how the U.S. and Mexico are playing roles in the development of Latin American markets as well as the role international members play in the Mexican markets.
Q: Everyone thinks of Mexico and Brazil when we talk about Latin America. What other opportunities can be found in Latin America?
A: Argentina used to be an active market but the progress has slowed down due to the economy. They have two futures exchanges, one is called Matba and the other is Rofex. Rofex is celebrating their centennial birthday this year. Also, Chile is a fairly developed economy. They have a well structured internal savings market including managed pension funds and investment strategies. Many Latin American countries model their internal savings strategies after Chile. Colombia is another country to keep an eye on. They have a strong bond futures market and a very solid clearing house. They are struggling with volume but have a strong structural set up. Finally, Costa Rica is attractive if you are interested in bond trading and Peru for fixed income.
Q: What is your relationship with Brazil?
A: We are not competing with each other. We feel that with the Latin American growth strategy, we complement each other well.
Q: How is the Mexican Stock Exchange helping to develop other Latin American markets?
A: Mexico is part of a working group helping align forces in Latin America. We are helping develop equity futures, currency futures and interest rate futures to allow hedging for the local companies in these emerging markets. We are also looking into partnerships to launch a tradable index for the Latin American region.
Q: What are some initiatives the Exchange has going on with the U.S. markets?
A: The Mexican Derivatives Exchange is looking to launch a commodities market modeled after the international market. The government needs to work out certain mechanisms to trade commodities but Mexico is very rich in oil, natural gas, white corn and sugar.
We also have a lot of working relationships including one with NYSE Euronext to develop an FX platform as well as one with Nasdaq to trade QQQ ETFs.
We have also made many changes at the exchange to facilitate the entrance of foreign participants to our market. Mexican authorities support the development of our derivatives market and allow omnibus accounts and segregation. We need that energy, that fuel that international players bring to the markets. It is not a chicken or egg situation. We are seeing that international members push liquidity and in the following year we will reinforce that.
Q: There were rumors circulating that you had an agreement with the CME Group involving the purchase of an equity stake in the exchange. What type of relationship do you have with the CME Group?
A: I cannot comment other than that it is a commercial agreement. It is in the early stages of development. There is a press release on our Web site addressing the relationship.
Q: Outside of work, I know you like to travel. Where are some of the recent places you’ve been?
A: Last year, I went to Cambodia to explore Angkor Wat. Another destination similar to the ruins in Cambodia is Bagan in Myanmar. I enjoyed Myanmar so much more due to the fact that I was not expecting to see such an archaeological wonder.
Q: Do you have archeological sites like that in Mexico?
A: Yes. Mexico’s Chiapas and Yucatan states house Mayan pyramids and temples. The areas are very tropical and the ruins remind me of the ones in Southeast Asia. Also, there is one of the largest pyramids in the world located on the border of Mexico and Guatemala. The society that built the pyramid was very smart. It was a very advanced society practicing math and science although I am not sure about derivatives.