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Latin America Investment News on Viva Tropical

Record Growth for Guatemala Stock Exchange

Article Summary:

During 2011 operations on the National Stock Exchange (BNV In Spanish) grew by 65% compared to the previous year, with participation from all sectors: government debt, corporate bonds and securities.

Photo Credit: El Periodico

Original Article Text From El Periodico via Google Translate :

The National Securities Exchange Of Negotiations Achieved Record

The amount of stock transactions reported a significant increase that remains so far in 2012. The trading activity in the National Stock Exchange (BVN) reported an increase of 65 percent in 2011 over 2010, which remains so far this year, due to increased uptake of liquidity of the Bank of Guatemala (Banguat ) and the companies issuing promissory notes and shares.

Rolando San Roman, general manager of the BVN, explains that trading volumes show an increase sginificativo in all markets, from corporate to government debt or the repo.

“The growth was influenced mainly by the reduction of within 7 days one night (overnight) of the CDP (Certificate of Deposit that places the Banguat to remove excess liquidity circulating in the economy that generates inflationary pressures) and a higher volume of trading in the repo market (short term), “said the executive.

According to the Report on the Work of the BVN, in 2011 the total volume traded was of Q425.6 billion, up 65 percent from 2010, where the repo market (short-term investments) amounted to Q194 billion and represents 45.5 percent of total volume traded on the Exchange.

It also highlights the return of preferred stock in 2011 authorized the placement of 4 emissions preferred and common shares, which represent a total emission of Q353 million, of which 40 percent has been negotiated to date, amount of Q143 million.

“The Q143 million are both common and preferred shares, which is a figure that is reached first in the stock market,” said in his report to shareholders, Luis Fernando Samayoa, President of BVN.

Protection on securities
Gabriela Escamilla, assistant manager of the BVN, notes that last year changed the rules of the Securities Repo and developed the Framework Agreement to Repurchase Securities which defines the process to be followed in case of failure to submit a settlement operation of a title.

This mechanism is “called margin calls. For example, if Q1 is reversed million in repos, but it turns out the day after the value drops to Q900 thousand, the new legislation provides a daily enhancement to the open side to receive the difference and if there is a surplus this shall also be provided ” Escamilla said.

San Roman says the changes in the value of securities in the repurchase market can be given because of a decline in demand or any news related to sovereign debt affects expectations of investors.

Link to Original Article:

From El Periodico

Latin America Investment News on Viva Tropical