Gerardo Santos Guerra
Mercado y Capitales y Valores, ABACO
Monterrey, México

My name is Gerardo Santos Guerra. I am in charge of the area of the Capital Markets of ABACO, Casa de Bolsa. My responsibility is to be in contact with, to be a link between the promotions area, which is the sales area of the brokerage firm, and the floor traders in Mexico City. All of the stock transactions in this country take place in Mexico City. My main responsibility consists of all these transactions of buying and selling shares of stock, of transactions that we call variable sales. I follow up on these types of transactions. Right now we have an extremely automated system. The client talks with the consultants that we have, this is in the promotions area. They recommend an investment, such as fixed income, which is in another area of capital markets, or in the area of variable income. Generally, a purchase of stocks is recommended as X percent of the investor's portfolio, depending on the state of the capital markets. They pass their orders on, we have an automated system in which each trader is at his own computer from which he can bring up the portfolio of the 200, 300, 500 customers that there are. Purchases and sales take place in less than a minute. We have a satellite system, information is sent to the sales floor which is a thousand kilometers away from here in Monterrey, and the floor trader announces a very simple summary of the kind of transaction; purchase or sale, the issuer, for example SEMEX or TELMEX are typical and both are issuers which trade in both Mexico and the United States, (TELMEX here in Mexico and TMX in the United States). The order is passed on at market price or at a limit price and in this way the trader starts to shout it out or to observe the board which is the work area where one checks the purchase and sale quotes on the sales floor. Or if we have an internal counterpart within the brokerage firm, we cross the order, that is, since all of these transactions are public issues, they have to be carried out at the center of the sales floor. The trader has to announce over the microphone, "ABACO Casa de Bolsa crosses one hundred thousand stocks of TELMEX," etc. So my job is basically to follow up on all these types of transactions.

So basically the idea of a typical day of work is to follow up on these transactions in the morning and in the afternoon it is a little more of analysis, technical verifications with tools such as Mexestock, technical analysis of stock behavior, of the issuers, which in Mexico are about 350, of which 80 are the most liquid. That is, those stocks in which you can most easily get into and within a day or two be out of again. So the afternoon is a little more of an administrative job.

And the last question has to do with experience with Americans. I have had a lot of dealings with Americans. ABACO began in 1985 with a branch here in Monterrey and a branch in Mexico City. Mainly because all of the major authorities are centralized in Mexico City. So even though this is a regional stock exchange agency, a large percentage of its personnel is located in Mexico City. Four years ago, five years ago, at the end of 1989, a subsidiary of ABACO was opened in New York City. We call it ABACO International Corporation and it is physically located in New York City. There is a very interesting statistic that I will use to explain a little about our experience with Americans. In capital markets, which includes the stock purchase-sale market and the federal government debt securities market as well as the private corporate debt market, there used to be almost $800 million dollars of foreign investment. We are talking about Americans, Canadians, Europeans, and Asians. Presently, the statistics up to November 1994 surpass 45 thousand million dollars, that is an explosive investment growth. So, the experience with foreigners and especially Americans is extremely important. Not only in the investment banking sector, but in general business, because they are the ones who really move things, they really move the market, they are the ones who have the capital through their pension funds, through their savings funds, etc. And they are participating very actively in the market. So, the experience has been very interesting because they are very demanding people. They are people who want the information quickly and of good quality. We have learned a lot from them because they have a lot of experience in the market, as in the case of our traders or our traders in the United States who have a lot of experience. They come from very important brokerage firms in the United States and the information has to be very quick and very clear in order to provide a better service and to continue to gain more clients. So, generally it has be a very good and interesting experience. Basically with this I conclude the interview, thank you.