Ecuador’s government is preparing legislation that would turn the country’s two securities exchanges into for-profit companies, a move that could lead to initial public offerings of the bourses, said Monica Villagomez, executive president of the Quito exchange.
The bill that administration officials showed Villagomez would make local markets “much more attractive to foreign investors,” she said in an Oct. 15 interview in Quito. The Bolsa de Valores de Quito may sell shares within a year of passage of the legislation, she said.
President Rafael Correa may propose a new markets law as early as next year to boost trading on local exchanges and increase worker participation in the stocks of Ecuadorean companies, Villagomez said. The new law would also create incentives to integrate the nation’s Quito and Guayaquil exchanges, reducing trading inefficiencies in the Andean country’s markets, she said.
“Becoming for-profit companies will allow interested third parties, institutions or foreign investors to participate in the bourse’s capital,” Villagomez said from the exchange’s newly remodeled offices in Quito. “Our ambition is to integrate with exchanges” in Chile, Colombia and Peru, “because if we don’t at least integrate with regional markets, we could disappear.”
Chile, Colombia and Peru will integrate their exchanges next month, Colombia stock exchange President Juan Pablo Cordoba said Oct 5. The integrated market will be Latin America’s top issuer with a total 563 stocks, and second in market capitalization with $564 billion, behind Brazil, he said.
“A small, fragmented bourse in a small country doesn’t have a bright future,” Villagomez said of Ecuador’s two securities exchanges. “It’s the difference between having a little pie or a big cake.”
Francisco Vizcaino, head of the nation’s securities regulator, couldn’t comment on the new law, an assistant who can’t be identified due to government policy said by telephone today. Finance Minister Patricio Rivera wasn’t available to comment, an official at the ministry’s press office who can’t be identified due to government policy said by telephone today.