* iShares launches exchange-traded funds for Mexico bonds
* ETFs meant to capture demand for emerging market debt
(Adds comments, background and byline)
By Michael O'Boyle
MEXICO CITY, July 16 (Reuters) - The first exchange-traded
funds that track Mexico's government bonds and T-bills began
trading on Thursday in a bid to capture investor demand for the
country's high-yield debt.
iShares began selling the five bond and T-bill ETFs on
Mexico's stock exchange in a listing worth 911 million pesos
($67 million), said officials at a stock exchange event.
Daniel Gamba, chief executive for Latin America and the
Caribbean at Barclays Global Investors, said the instruments
were aimed mostly at retail and global investors and were the
first ETFs based on an emerging market's sovereign debt.
"Yields in the U.S. are really zero. There is a lot of
interest to get exposure, above all to sovereign Mexican
government bonds, which are really stable," Gamba said.
Mexico's benchmark 10-year bond <MX10YT=RR> currently
carries a yield of 8.13 percent.
Gamba said the funds could capture as much as a quarter of
the Mexican ETF market, currently worth around 81 billion pesos
($6 billion), in as little as two or three years.
The ETFs could eventually be listed in the United States,
Japan and Abu Dhabi.
iShares, the world's biggest ETF provider, has listed the
108 funds in Mexico, including seven that track Mexican stocks
and corporate debt, plus five new funds that track Mexican
debt.
iShares ETFs account for up to a quarter of stock trading
volume in Mexico, most of that concentrated in the NAFTRAC fund
<NAFTRAC02.MX> that follows the IPC <.MXX> benchmark equities
index.
Four of the new Mexican ETFs are baskets of
peso-denominated debt: one-month to one-year local treasury
bills <CETETRC.MX>; one- to five-year issues <M5TRAC.MX>;
five-year to 10-year bonds <M10TRAC.MX>; and inflation-linked
bonds <UDITRAC.MX>.
The fifth fund tracks Mexico's dollar-denominated bonds
<UMSTRAC.MX>.
Last month, U.S. fund manager BlackRock Inc <BLK.N> agreed
to buy Barclays' Global Investors business, which includes the
iShares business.
($1 = 13.59 pesos)
(Additional reporting by Ellis Mnyandu in New York; Editing by
Padraic Cassidy)
Keywords: MARKETS MEXICO/ETF
