Investment Houses

[edgeld]

Are there any third party reports available on the Investment Houses in the DR. Something that might give some insight into the the stability/financial viability of these institutions.

Thank you in advance for any help.

[Tallman1818]

Do you want to invest in the Stock Market?? or just a regular CD in a bank?????

[Gordon Gekko]

There's no "stock market" in the DR. There's a semi-functional bonds market with very few options and not very liquid. Please let me know if my understanding of the current situation is erroneous.

[PICHARDO]

Originally Posted by edgeld

Are there any third party reports available on the Investment Houses in the DR. Something that might give some insight into the the stability/financial viability of these institutions.

Thank you in advance for any help.

Yes...

The thing is that they're done on a per-request basis, where you request the data you need exported and the firm would collect such info from strong/verifiable resources at their disposal; for a fee, or course.

You can get some data yourself by mining the Central Bank's financial quarterly disclosures (all published in the local news by law). I don't recommend you do this yourself, but in fact hire a financial consultant of the banking industry in the DR.

Expect to pay a 15% to 25% higher fee for such reports in the DR than compared to the same services in the US/EU markets correspondingly.

Investment houses in the DR are required to file quarterly financial status reports to the securities arm of the Central Bank as required by law. Still a good 35% falls out of the low to mid range regulated by such financial requirements.

Last report we requested on a plethora of indicators in the DR was done via a US firm with a presence in the DR's financial markets.
We paid hefty as the data required was also extended to micro loaning for profits in the DR.

Hope this helps!

[PICHARDO]

Originally Posted by Gordon Gekko

There's no "stock market" in the DR. There's a semi-functional bonds market with very few options and not very liquid. Please let me know if my understanding of the current situation is erroneous.

Since when an over 25 billion RD$ trade market is not very liquid????

[Tamborista]

Originally Posted by PICHARDO

Since when an over 25 billion RD$ trade market is not very liquid????

Where do these issues trade Pichardo?

Dominican National Brewery Bonds are about the only issue I can even find on Bloomberg.

tambo'

[PICHARDO]

The Central Bank issues certificates and the gov also puts the foreign and internal debt into foreign traded bond markets. The bonds are not individual but issue on "inter-bank" deals along secondary backing by mid risk management brokers in the market. You can get those bonds by requesting a list of available special bonds issues from the CB on each quarter.

The initial amount to invest on those bonds is in the millions.
They trade on the exchange under 10+ year notes & bonds.

[D Estrella]

The first thing we should clarify is that the Bolsa de Valores in DR is 100% fixed income. We don't have any stocks listed yet. That will come in the future.
In past years, the market used to be 100% commercial paper and as Pichardo mentioned here, not very liquid. However, that is not the case anymore. To give you some perspective, the total volume traded in 2006 was RD$1.6 billion. We closed 2007 with a volume of RD$15.4 billion (more than 800% increase). So far in 2008 in the first 4 months of the year, we have traded over RD$10.2 billion (more than 500% compared to the same period last year). There are 13 different companies with a range of products. The curve extends to 10 years. Of the 13 companies, only two have commercial paper. The others go to 3, 5, 8 and 10 years. There is trading almost every day in the secondary market. We have a platform that allows you to trade any product in real time (even though at the moment it is only fixed income).

You should be able to find financial statements on all the puestos de bolsas as well as the issuers in our website BOLSA DE VALORES DE LA REPUBLICA DOMINICANA and also in the SIV's website (the regulators), Superintendencia de Valores de la República Dominicana
In the case of Banco Popular, Banco Leon, Banco Nacional de la Vivienda, Banco Adopem, Banco Ademi, BHD Valores and others, you also have available the rating agencies report (Feller Rate and Fitch Dominicana) which is public information.
I would not say the market here is semi-functional. These companies (such as Cerveceria Nacional Dominicana--Presidente Beer and Banco Popular) are issuing bonds and they have been able to place the issue with no problems at all. We see more trading everyday.
For those of you wondering what they need to do to invest in the Bolsa here, you need to go to a Puesto de Bolsa (PB) that is approved by the SIV (our SEC equivalent and these 12 PB are listed in our website) and open an account with them.
Hope this e-mail clarifies some of the confusion.

[PICHARDO]

Originally Posted by Tamborista

Where do these issues trade Pichardo?

Dominican National Brewery Bonds are about the only issue I can even find on Bloomberg.

tambo'

Tambo:

If you don't understand much about financial dealings of Dominican Certificates on the stock market (not Bolsa de Valores of DR) please don't be giving negative feedback. First you ask questions, and then you investigate before you take that road.

I hold several certificados de inversiones from both the CB and the DR debt bonds in US traded bonds. Currently I hold 12.3 RD$ in those bonds. If those that post here on this forum don't know how to go about getting to those particular bonds, not my fault.

As explained, Special investment bonds and certificates are done each quarter by the CB via non-DR investment brokers. It's you the person of interest responsible to find the Certificates you most want and trace the investment broker/bank holding those interests.

Now I guess my 12.3 RD$ are made of magic dust, since you can't get any due to lack of knowledge of how the Certificates are handled by the CB...

Don't go about confusing la Bolsa de Valors of the DR, a semi-private and DR traded stock exchange to the long standing Certificates traded under investment brokers in the stock exchange (yes, you read right!) where they're traded under a partnership special bond certificate with full SE sanctioning...


The figure of trade I offered is my direct knowledge of the available and pooled value of such certificates via my portfolio manager and based on the quarterly reports of the CB in the DR.

Now I'll go and play with my magical dust Certificates and find some pictures for the Metro thread as you suggested along your negative feedback!

[Fernandez]

Aside From Short Term Certificates, Promissory Notes And A Variety Of Central Bank Linked Instruments (dollar/euro), The Dominican Market Holds Relatively Little In Terms Of Financial Alternatives Compared To The Depth Of Sources Which Is Common To Our Firms In The Developed World. Naturally, For Dominicans It Is A Growing Market That They Will Develope Over Time, Primarily Through The Investment Pools Being Generated By The Afp Funds.
We Started Investing In The Dr In The Mid 80's And Have Transacted Some Debt/equity Swaps In Via The Central Bank To Acquire Commercial Entities When The Government Started Divesting- Back In The Early 90's- That Program Is Over.
The Peso Forms Part Of Some Carribean / Ldc Indexed Cd's Issued By The Larger Usa Firms (basked Currency Plays), But With The Fiasco Of Bank Frauds And Collapeses In Such A Small Economy, The Peso Has Become Less Interesting. One Can Question Its Relative Value Vis A Vis Its True Value, Given That It Trades Only In The Dr - Perhaps Overvalued At Present.

Aside From Tourism Projects That Have Had Access To Some Capital, And Then Only In Lush Liquidity Times, Promoted Well By Usa Investment Firms (primarily Bear Stearns???), There Is Little Sourcing Of Information From Individual Firms. The Law Firms, Like Pellerano And Herrera Have Good Detail On Tourism, And Represent The Leading Foreing Firms Intersted In The Dr For One Reason Or Another.

The Bolsa De Valores Intermediates On Commercial Paper And Fixed Income Instruments, But The Market Is Very Small And An Average Daily Trade At Any Small Usa Firm Can Move The Paper In The Dr- In The End, It Is A Poor Country With Close Proximity To The States That Feels The Pressures That Come From Such Proximity- And Where The Imf (even Today) Has A Commanding Role In Its Affairs. So,

Get The Information You Need From Individual Informed Sources Locally, And Read Up On The Information Posted By The Central Bank. In Reality, You Need To Have Good Sence Of The Emerging Market World To Understand The Dr- And For Business Likenes, Having Had A Business For The Last 12 Years In The Dr, I Suggest It Is Similar To Nigeria = Without The Oil.