Mexican Treasury Securities Auctions Show Increasing Underpricing Trend Over Time
The Mexican government securities auctions show underpricing compared to the secondary market, especially from 1996-2000. Changes in auction format don't fully explain this trend. Factors like competition, bidder participation, and market uncertainty affect auction prices, but secondary market features like liquidity and inventory may play a bigger role. This suggests that improving secondary market conditions could make the primary market more efficient.