Secondary Market in DR?

jartherrera · #1 10-02-2006, 11:38 PM

After DOWS' panel for Semana Dominicana on 9/20**, one question the audience kept wondering about was: what will it take for a Secondary Securities Market to exist and function in the DR?

There is a law, there is the interest of the experts, and the capital is there. Also it makes complete sense for the sake of the public and transparency. So, what is missing? what needs to happen at a public and private level for a secondary market to exist? And how can a stock market un DR compete with the rates the Central Bank offers?

**DOWS hosted a panel for Semana Dominicana on 9/20 at Goldman Sachs in New York City.

Panelists included:
-Jose Maldonado, from Russin, Vecchi & Heredia Bonetti
-Frank Abate, from Women's World Bank
-Luis Gonzalez, from USAID
-Jose Luis Martinez, Bear Stearns
-Marcos Troncoso, e-Mprende

Hillbilly · #2 10-03-2006, 09:09 AM

By secondary market you mean something like a real stock exchange? Where a company's shares are traded?

I am sure that this will face incredible roadblocks....I can''t see any of the magnates here diluting their control of their companies. Like Ramos releasing shares of La Sirena, or Franjul releasing shares of La Romana Corp., I do not think you can buy shares of Tricom in the DR, only inthe US. Same with Verizon, what was Falconbridge, CocaCola, etc...

Interesting idea...let's see where it goes...

HB

Jon S. · #3 10-15-2006, 10:31 PM

Quote:

Originally Posted by Hillbilly

By secondary market you mean something like a real stock exchange? Where a company's shares are traded?

I am sure that this will face incredible roadblocks....I can''t see any of the magnates here diluting their control of their companies. Like Ramos releasing shares of La Sirena, or Franjul releasing shares of La Romana Corp., I do not think you can buy shares of Tricom in the DR, only inthe US. Same with Verizon, what was Falconbridge, CocaCola, etc...

Interesting idea...let's see where it goes...

HB

I would love to see this happen, but I think that the "Powers that Be" aka local magnates wouldn't allow this to happen. Oh well, one day.....

jartherrera · #4 10-16-2006, 03:56 PM

I meant ANY exchange of the securities that have been issued by some companies (like INDUVECA). Those were commercial papers I think?

A stock exchange would be great in the future. May have to be when the next generation takes over though, as I agree with your comment of the big shots unwilling to not only give up some ownership of their company, but also releasing information to the public. But there is SO much capital becoming available from the pension funds, that maybe a start will be for these companies to release shares to be part of mutual funds, for example. What would their motivation be? Decrease their cost of capital, and help divert inflation...maybe I'm naive?

emerging11 · #5 10-17-2006, 11:11 AM

Currently there are a few debt issues being floated, but the difficulty is in making these issues trade on a "true" secondary market. I think that's where the impediments are.

Also, the "Cultura Bursatil" is not there. While we could agree/disagree that Wall Street is a casino, we have to agree that the odds are better than playing the lottery. Currently the DR does not have a capital markets culture and it needs to be develop. (more on this later)

Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue

Market Economy · #6 10-17-2006, 01:40 PM

Please visit the followign Blog from The New York Times, where the value of Wall Street to society is questioned.

DealBook - Mergers, Acquisitions, Venture Capital, Hedge Funds - New York Times

According to some in the Blog, much of the innovation Wall Street has brought to Main Street has been positive and value adding (just think about Mortgage Backed Securities and Credit Default Swaps).

Would love to here your comments. Regards.

Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue

aegap · #7 10-17-2006, 05:56 PM

ME, do you think there's a strong change IFCA will change the current "culture"?

Market Economy · #8 10-18-2006, 11:03 AM

Aegap,

I think IFCA's goal, at least at the beginning, is to attract foreign banks and investment firms, which arguably, may already have the 'culture' required to participate in these markets. My opinion is that the country should not wait for IFCA to get the 'culture' but to develop it now.

Note: This is my personal opinion, an should not constitute investment
advice. E-mail me at my personal address if you want to develop a dialogue

Ishido · #9 10-25-2006, 11:35 AM

For a secondary market in DR i think what we really need it’s different kinds of securities and “in volume”. This is to inject liquidity to the market and creating culture in the way. But a secondary market based on corporations securities, be it debt or shares, i think that there is long way to go. This is because of the think you had already said about the magnates diluting their power on the companies, the dilemma with the releasing of financial statements and “tax evasion” problem, the littler knowledge that financial managers of corporation have about how to use the securities market mechanism to raise funds and a combination of others things that have to be work out.

Probably the kinds of securities which will have more acceptances in the short term are the “fondos inmobiliarios” (very alike REIT`s), because the real state market in DR is growing very fast; and the “fondos de capital de riesgo” (something like venture capital investment funds), in this way the corporation don’t necessarily have to release a “big pack” of financial information. These kinds of investment company doesn’t need and already develop securities market to work.

And finally there are securities like ADRs or GDRs, depositary recipe design for the dominican market, but i’m not really sure if these kind of instrument are going to work over here, because of it’s cost. A wicked idea but should be interesting to see it!.

About the IFCA, i think that ME is right about that financial paradise, they won’t aim for the local market in the beginning, and not even while it doesn’t worth it.

helpmann · #10 10-25-2006, 11:43 AM

Quote:

Originally Posted by Ishido

And finally there are securities like ADRs or GDRs, depositary recipe design for the dominican market, but i’m not really sure if these kind of instrument are going to work over here, because of it’s cost. A wicked idea but should be interesting to see it!.

About the IFCA, i think that ME is right about that financial paradise, they won’t aim for the local market in the beginning, and not even while it doesn’t worth it.

I believe Tricom (DR company) has an ADR program that trades on the NYSE (of course ADRs are U.S. secondary markets.)

I don't believe there are any others from DR.

-Helpmann