S&P BMV IPC Index Demystified: What Investors Need to Know About Mexico’s Leading Stock Market Indicator

“The S&P BMV IPC index is a defining characteristic of Mexico’s economic stability and a vital instrument for investors in the next emerging market.”

Borja Salvador – Senior Market Analyst
bsalvador@tvmarkets.com

The Mexican stock market

What is the benchmark index in the Mexican stock market?

The S&P Dow Jones Indices and BMV (the Mexican stock exchange) supervise the S&P BMV IPC, the main stock market index in Mexico.

To understand how the BMV index works, we can draw a comparison with the S&P 500, which includes the 500 largest companies in the United States. Similarly, the BMV index serves a comparable function for Mexico. Specifically, the term ‘IPC’ is an abbreviation of the price and quotation index, and the BMV index comprises the most liquid and largest capitalization stocks that represent crucial sectors of the Mexican economy.

Traders trust the S&P BMV IPC index to evaluate the economic conditions of the Mexican stock market and make solid investments within the Mexican stock market, thanks to its broad coverage and reliability.

History and development of the S&P BMV IPC index

The BMV IPC index was first introduced in 1978 and has, subsequently, become the standard for the stock market in Mexico, as we will see below. Furthermore, its composition grew over time to provide the investor with a representative sample of the entire economy.

In recent years, this index has grown more than 200%, as we can see in this graph.

The BMV and the S&P Dow Jones index company signed a licensing agreement in May 2015, with the aim of ensuring that the existing product range complied with international standards and was accessible to global markets.

What is the index like historically?