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Colombia, Chile and Peru: An integration of stock markets

The integration of the Colombuian, Chilean, and Peruvian stock markets could help build economic infrastructure for regionalization.

FORO writes, "During 2011, the merge of the Colombian, Chilean and Peruvian stock markets should consolidate. These three countries agreed in 2009 to form a common stock market and it has become functional in 2011. With this expansion, issuers and investors from the three countries will be able to channel more resources and aggregate financial value without increasing transaction costs. Nevertheless, stock market integration should come in phases corresponding to increases in market liquidity and the number of the securities available to investors. A step-by-step integration could mirror the success of European stock market. Indeed, the current context is favorable as three healthy economies are interested in increase their scale."

Implications

FORO writes, "The full consolidation of these three markets will lead to a market capitalization of US$470 billion — 51 percent correspond to the Chilean market, 34 percent from Colombia and 15 percent from Peru. Moreover, this integrated market would be greater than the US$350 billion Mexico market capitalization and it would be second in the region after Brazil’s market capitalization (US1.1 trillion)."

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Sources:

FORO Nacional/Internacional, April 2011, page 9: http://newsletters.clearsignals.org/FORO_Apr2011_Letter.pdf#page=9