Local stock market grows

PANAMA. Panama continues attracting foreign investment, despite the global financial crisis. This is the case with the stock market, which has experienced a rise in trade, and new security houses, mainly foreigners, have entered the market.

From the 47 security houses recognized by the National Securities Commission (CNV), another seven were incorporated, of which three are from Venezuelan capital, one Canadian and three national.

Additionally, other three Venezuelan security houses are in the process of obtaining their license.

“We have seen a big boom, mainly from the Venezuelan capital,” said the national director of security marketing from the National Securities Commission, Marelissa Quintero.

For Quintero, this inflow of Venezuelan investors comes as a direct result of the political situation in that country, which forces them to look for other countries in which to invest their capital.

Besides the security houses, 2008 also saw four new investment advisory houses set up shop in Panama, two Panamanian, one from Mexico and one from Costa Rica.

Not only has the number of agents increased, but the number of transactions.

As a proof of this rise, the CNV registered $33 billion in total transactions made in Panama, $10.2 billion more in 2007.

Of the traded volume, 88.5 percent derive from international transactions, while 11.48 percent of the transactions were made within the local market.

Quintero considers the rising trend of new agents in the stock market with continue well into 2009, seeing as Panama is still developing when it comes to its stock market.

She believes Panama’s stock market is attractive to foreign investors because of the legal framework for the financial sector, the use of the dollar, and few and easy transaction requirements.

According to the Vice-president and general manager of Mundial Asset Management, Gabriel Fabrega, “Panama offers logistics and fiscal incentives highly attractive to foreign capital.”

He believes the competition is positive, “seeing as more participate, the greater potential for the development of our capital market.”

Additionally, he explained that many security houses have specific niches and do not necessarily compete directly against each other. He did recognize however that there is a great supply. “You have to be outstanding to be successful in this market,” he concluded.