Goldman Plans Expansion in Mexico
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US. – Goldman Sachs Group Inc. is planning to open a stock-trading brokerage in Mexico as it boosts its presence in Latin America’s second-largest economy.
The move will allow the firm to buy and sell stocks locally on behalf of clients, according to people with knowledge of the matter. The new business line, still months away from being up and running, would give Goldman a bigger role in a market where some of its larger U.S. banking rivals already offer full-service stock brokerages.
Goldman already had a license to carry out fixed-income trades in Mexico, a business it’s been operating for the past few years, and plans to expand the platform into equities. A fully functional stock brokerage in Mexico could also bolster Goldman’s effort to handle more initial public offerings, with the ability to provide liquidity following the IPOs.
"The companies that are issuing stock want the local investors to be able to buy that stock,” said Larry Tabb, founder of Tabb Group LLC, a New York-based firm that analyzes the structure of financial markets.
Investing in Mexico can prove challenging -- especially in 2019. Many in the business community have been on edge since Andres Manuel Lopez Obrador was elected president last July on a populist platform.
Earlier this month, his administration cut the 2019 growth estimate for Mexico -- the region’s biggest economy after Brazil -- to 1.1 percent to 2.1 percent from 1.5 percent to 2.5 percent.