Morgan Stanley (MS), owner of the world’s biggest brokerage, is setting up a fixed-income group in Mexico as part of its expansion in Latin America, said Christopher Harland, the bank’s regional head.
The addition of the fixed-income team follows the bank’s move to trade stocks on the Mexican exchange, said Harland, a 28-year veteran of the bank. Morgan Stanley operates integrated securities firms in Brazil and Mexico with smaller representative offices in Peru and Argentina, a country where Harland said Morgan Stanley has “a number of very high quality mandates” to manage debt and equity offerings.
“The increasing trend is to have some physical presence,” Harland said in an interview at Bloomberg’s New York headquarters yesterday. “One person, two people, as small as that may sound, makes a world of difference. Being local doesn’t mean going in all guns blazing. Today if you wait for the different silos to be in place you’ll be too late.”
Morgan Stanley is building up its staff in the region as other banks retreat. ING Groep NV, the biggest Dutch financial services company, cut jobs from its Latin America dollar- denominated debt group in December, firing five people in Mexico.
Harland said the number of employees, excluding secretaries, has climbed to 35 in Mexico from 11 when he took over the position four years ago. It rose to 205 from 161 in Brazil, which accounts for about 55 percent of the bank’s business in Latin America, according to Harland.
“I’m very upbeat about the prospects for Brazil,” he said. “But I’m even more upbeat in growth terms for some of the Andean markets.”
The yield on Mexico’s benchmark peso-denominated bonds due in 2024 has dropped 15 basis points, or 0.15 percentage point, this year to 6.51 percent, according to data compiled by Bloomberg.
The extra yield investors demand to own Mexican dollar bonds instead of U.S. Treasuries narrowed 13 basis points this year to 209, according to JPMorgan Chase & Co. The securities have returned 0.5 percent this year through yesterday, compared with a 4.1 percent gain for emerging-market debt.
Related News and Information:
To contact the reporter on this story: Drew Benson in New York at firstname.lastname@example.org
To contact the editor responsible for this story: David Papadopoulos at email@example.com