October 18, 2018 / 11:01 AM / a year ago

RPT-UPDATE 1-Mexico IPO woes grow after Mifel pulls listing

(Repeats story that ran earlier, with no changes to text)

By Christine Murray and Sheky Espejo

MEXICO CITY, Oct 17 (Reuters) - Mexico’s Grupo Financiero Mifel has postponed an initial public offering the bank had hoped to close on Wednesday, according to its announcement to the stock market, a decision first reported by Reuters.

It is the second highly anticipated listing canceled this week in a gloomy sign for the country’s capital markets.

Mifel, a mid-sized bank that had hoped to raise around $350 million, had hired banks J.P. Morgan and Bank of America Merrill Lynch to coordinate the deal.

However, the bank said late on Wednesday that it had put the deal on hold because of market conditions, without giving further details.

One of the sources had told Reuters earlier that general market conditions did not allow the company to get the terms it wanted. Another said there was not enough demand from local pension funds known as afores.

A senior executive at Mifel did not reply to a request for comment. Bank of America referred requests for comment to J.P. Morgan, which declined to comment.

Mifel had planned to place 167 million shares, plus a possible overallotment option, at between 35 pesos and 40 pesos per share. The book was due to close on Wednesday with the float on Thursday.

Retailer and lender Grupo Coppel called off a more than $1 billion IPO earlier this week after the family owners backed out, Reuters reported on Tuesday.

Mexico’s equity market lags other comparable economies. Its stock market capitalization is equivalent to around 36 percent of gross domestic product (GDP), behind Brazil, Colombia and Peru, according to World Bank Data.

This year, just one company, Promecap Acquisition Company , has listed shares on the Bolsa Mexicana de Valores amid emerging market turbulence, worries over the future of a new North American trade agreement and nervousness over the election of leftist Andres Manuel Lopez Obrador as president.

Since President-elect Lopez Obrador’s victory in July, markets have been calmed by a deal Mexico reached on trade with the United States and Canada.

The peso has strengthened around 5 percent against the dollar, and the S&P/BMV IPC index has risen slightly since the beginning of July, even amid an emerging markets rout.

The last notable bank IPO in Mexico was Banco Bajio in June 2017, which raised around 8.8 billion pesos ($466 million). ($1 = 18.8727 Mexican pesos) (Reporting by Christine Murray and Sheky Espejo; Additional reporting by Stefanie Eschenbacher; Editing by Dave Graham, Tom Brown and Muralikumar Anantharaman)

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