Representatives from the Bogota stock exchange are today meeting with their counterparts from Chile and Peru in Lima to sign a pact creating Latin America’s second largest stock market by value.
The agreement says that the integration between the three exchanges is to begin on November 22. The stock markets will continue to be based in their home cities but will pool information and allow investors at one centre to trade in any of the others.
Bogota-based investors will therefore have the chance to invest in another 476 publically-listed companies, a vast increase on the 84 currently available for trading in the Colombian capital. Felipe Duque, director of Spanish Bank BBVA’s Colombia subsidiary told newspaper El Tiempo that the move marked “a very important step with regards to establishing a bigger market in transaction volumes”.
The different economic make-up of the three partners is causing the most excitement at the Bogota exchange as this will lead to a much greater choice in investments. Colombian investors currently have the option of buying only one retail company’s stock for example (Exito) but will soon be able to buy and sell shares in several large Chilean retail groups from their trading chairs. The allied exchanges will have a combined market capitalisation of some US $614 million on current values.
All three indices have enjoyed rapid growth in 2010, with the Bogota index at a record high point having gained 37% since the start of the year. It is hoped that the integration will spur even greater development over the next few years. Integration of stock exchanges has been successful elsewhere in the world recently, most notably in Scandinavia’s OMX Exchange.