MEXICO CITY - The nation's newly certified Afores wasted no time in recruiting clients last month.
The Afores began advertising Feb. 1 and taking customers Feb. 3. Three days later, Afore Banamex announced it already had signed up 100,000 customers.
The certification last month of 12 private companies to manage assets for more than 10 million workers was another key step toward launching the Mexican government's ambitious pension reforms.
The Afores are competing to manage the retirement funds of the workers. They could handle about $3 billion by the end of 1997, a figure some money managers expect to rise to $12 billion - 3.5% of GDP - in 1998. All the resources must be invested in securities issued in Mexico, although the exact investment regime has not yet been made public.
The 12 certified companies were chosen from 18 firms that passed the first stage of the approval process in December (Pensions & Investments, Jan. 6).
The Afore belonging to ING Baring merged with Afore Bital -sponsored by property of Grupo Financiero Bital, Mexico City - while the five other Afores still could be certified before March 3 if they meet certain technical requirements, according to Fernando Sol¡s Sober¢n, the president of the National Commission on the Retirement Saving System, or Consar, the pension regulatory body.
The Afore belonging to the state-owned Mexican Social Security Institute was among those not certified. But Institute Director Genaro Borrego said his Afore, Afore XXI, would be ready soon, and many analysts expect it to be a formidable competitor.
While the Afores rushed to enlist clients, the Consar announced Feb. 6 that the legal market share of 17% per Afore would mean a limit of 1,677,432 accounts - a restriction Afore Bancomer said it might eventually challenge in court.
While both Afore Banamex and Afore Bancomer could reach the See Mexico on page 19Continued from page 17
17% limit relatively quickly, other industry executives plan to attract small numbers of relatively high-income people.
Afore Inbursa, which belongs to Grupo Financiero Inbursa, Mexico City, will use a unique strategy. While most companies will take a part of workers' contributions as their commission, Inbursa will only take a cut of each account's real investment earnings.
"We don't see why we should touch our customers' capital in order to turn a profit," said Roberto Isaac, director general of Afore Inbursa, who added his initial goal is a market share of 2% to 3%. "Our goal is to have a small market share, but one made up of very committed customers."
One obstacle all Afores face is convincing skeptical workers to join a private pension manager. Accounts of workers who do not invest with a private firm will be placed in a special fund in the Bank of Mexico, the central bank. After four years, government regulators will distribute the accounts among the Afores.
Authorized Afores and their shareholders are:
Afore Banamex: Grupo Financiero Banamex-Accival;
Afore Bancomer: GF Bancomer, Aetna International;
Afore Bital: GF Bital, ING Baring;
Afore Genesis: Seguros Genesis;
Afore Inbursa: GF Inbursa;
Afore Previnter: Boston AIG Co., Bank of Nova Scotia;
Afore Tepeyac: Seguros Tepeyac;
Bancrecer-Dresdner Afore: Bancrecer-Dresdner Pension Fund Holdings, Allianz Mexico Insurance Co.;
Garante Afore: GF Serfin, Citibank, Habitat Desarrollo Internacional;
Profuturo GNP Afore: Grupo Nacional Provincial, Provida Internacional, Banco Bilbao Vizcaya;
Santander Mexicano Afore: Santander Investment, Banco Mexicano; and
S¢lida Banorte Afore: GF Banorte.