Tuesday, May 31, 2011

Peru, Columbia, and Chile Merge Stock Markets

This completely was off my radar, but online buddy Josh Brown at The Reformed Broker mentioned that the stock exchanges of Peru, Columbia, and Chile are combining into one.  While you might at first glance yawn, Peru [May 20, 2009: Year to Date Returns by Country - Go Peru!] and Chile in particular have quite exciting (if relatively small) markets, are were amongst the best performers in the past few years.  I do not not much at all about Columbia however.

Here is an older story that focuses on Chile  [May 28, 2009: WSJ - Prudent Chile Thrives Amid Downturn], and one on Peru [Jul 2, 2010: NYT - Economies in Latin America Race Ahead]

Via Christian Science Monitor

  • Peru, Colombia, and Chile will formally merge their stock markets Monday, creating the second-largest bourse in Latin America after Brazil and promising to increase liquidity in the mineral-rich Andean region.  
  • The market alliance of the three right-leaning nations spanning most of South America's Pacific coast gives investors better exposure to assets linked to the region’s natural resources and its rising middle class
  • The launch of the regional bourse, dubbed the Mercado Integrado Latino Americano (MILA)
  • Mining companies dominate all three bourses, accounting for 60 percent of the Lima stock exchange alone, according to analyst Hector Collantes of Apoyo. “The MILA brings closer to the market the opportunity to gain exposure to Peruvian consumption investment vehicles via those companies listed in Bogotá and Santiago,” says Mr. Collantes. “[M]ore investors and investment options might increase overall liquidity.”
  • On the MILA, the Lima exchange is the largest by number yet the smallest by market capitalization, with $83 billion spread over 248 companies at the end of April. The Santiago stock exchange had $343 billion among 230 companies at the end of April while the Colombia exchange had $217 billion among 83 companies.

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