* Stock exchange expects two foreign listings next year
* Says four local companies could offer shares by year-end
* Calls for better regulations in Colombia capital markets
By Helen Murphy and Nelson Bocanegra
BOGOTA, May 20 Colombia aims to
"internationalize" its capital markets further in the coming
years, attracting more foreign companies to its stock market and
bring in overseas investors seeking to tap into higher yielding
emerging markets, the head of the stock exchange said on Monday.
The Andean nation, which currently has five international
companies listed on its stock exchange, is seeking to bring at
least two more overseas offerings next year to trade alongside
Mexico's Cemex and Canada's Pacific Rubiales on
Bogota's stock exchange, Juan Pablo Cordoba said at the Reuters
Latin America Investment Summit.
He also hopes to clinch another four local listings this
year, following cement maker Argos, which issued $765
million worth of shares earlier this month.
"The Colombian market will benefit from having more
players," Cordoba told the Latin American Investment Summit. "To
achieve that there are two paths - one is to wait for them to
come and other is to make it happen and seek greater
internationalization of Colombia's capital markets."
Colombia wants to bolster the volume of foreign investment
in its stock market and attract new interest to the corporate
bond market in a bid to raise the Andean nation's profile and
boost liquidity, said Cordoba. In 2012 the stock market had 14
percent foreign participation, up from 3 percent in 2008.
"There's a couple of (international) companies that are
contemplating the possibility (of participating in the market),
The stock market had a traded volume of $40 billion in 2012
and a market capitalization of $254 billion at the end of March
Fixed income markets traded average daily volume of $3.4
billion in 2012. Cordoba expects as much as 12 trillion pesos
($6.5 billion) in corporate debt issues this year, up from 10
trillion pesos in 2010.
Interest in Colombia's capital markets has soared since 2002
when former President Alvaro Uribe took office and launched a
heavy military offensive against drug-funded insurgents who back
then controlled much of Colombia's resource-rich mountains.
A decade ago, Colombia was considered too risky for many
investors, as Marxist rebels and right-wing paramilitaries
battled for control of the nation's lucrative cocaine industry,
kidnapping company executives and massacring rural residents.
A strong financial regulatory environment as well as major
improvements to Colombia's security and three investment-grade
ratings helped attract a record $16.7 billion in foreign direct
investment and cash to its stock and bond markets last year.
Cordoba reckons that while a successful outcome to peace
talks with the Revolutionary Armed Forces of Colombia will
further improve the nation's reputation, investors have already
largely priced-in the security issue in money decisions.
"The peace talks and the general security situation has been
discounted as far as the vision of investors is concerned,"
A new tax reform should help clinch more overseas interest
to Colombia's fixed income and derivatives market, he said.
Events are planned in New York and London next month to
explain to investors why they should be tapping its capital
Cordoba said a scandal that engulfed the nation's biggest
brokerage, Interbolsa, has had limited impact on the market's
Interbolsa was intervened and dissolved last year following
a liquidity problem that left it unable to make $11 million in
bank payments. A criminal investigation is under way to
establish if there were possible conflicts of interest, share
price manipulation and "hiding" of information by the brokerage.
"In any country, there's always this challenge, I don't
think it's an issue of more regulation, but better regulation.
It's understanding better the market operations and anticipate,"
A lawmaker has also alleged Interbolsa was laundering money
for drug traffickers.
Cordoba forecast that the extra liquidity central banks in
developed nations injected to their economies to boost growth
will continue to flood into countries like Colombia for the
The additional capital flows helped strengthen the peso
about 9 percent in 2012 until verbal and actual intervention by
the finance ministry and central bank weakened more than 4
percent this year.
"For at least the next 20 years we will see capital flows to
emerging markets for obvious reasons," said Cordoba, who expects
the economy to grow about 4 percent this year. "Growth rates and
investment rates will be higher than in developed nations and so
dollars will continue to flow into the region."
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(Reporting by Helen Murphy; Editing by Bob Burgdorfer)