The third session of the webinar series Miércoles Bursátiles de las Américas organized by AMERCA took place on Wednesday, September 16, 2020, titled “The Impact of the Capital Markets on Economies”.
The presenters were Mr. Gerardo Argüello (Gerente General Bolsa de Valores de Nicaragua), Mrs. Maricruz Aparicio, (Gerente General Bolsa Centroamericana de Valores), Mr. Valentin Arrieta Whisonant (Gerente General Bolsa de Valores de El Salvador) and Mr. Iván Ariel Carvajal Sánchez (Gerente de Planificación Estratégica y Mercados Bolsa de Valores de la Republica Dominicana) was the moderator of the Webinar.
Mr. Carvajal started the session mentioning the big impact of the COVID and how it affects the markets, especially on transactions with public debt, which have a very important weight on this economic sector. Although this can be denominated as the “pandemic of uncertainty”, he believes our governments and companies will be able to rise against the virus, lift the economy, and create jobs. To be able to achieve this, economic policies must be developed and adapted. We need the ability to deal with the pandemic, this will be key for the success of markets and our economies.
Mrs. Aparicio elaborated on this paradigmatic time, and the importance to prepare our organizations for the 21st century. Mr. Arrieta agreed and confirmed the vital importance of capital markets for the economic recovery. Experienced and solid markets are the perfect ground for financing projects that will help our economies to recover. Our stock markets and brokers have made an effort to continue working from home with almost full operations during the lockdowns in each country, this is the commitment our sector has for the recovery of our economies.
Mrs. Aparicio highlights the need for corporate governance reorientation and the essence of pricing, communication with regulators, and development of institutional objectives, for our organization’s goals. All the Exchanges members of AMERCA study these and more topics on our Regulations Committee, with a regional focus.
Mr. Argüello explained the operation of primary markets, where investors participate in the initial offering, the progress, and profits of the issuers who were financed thru the capital market. Also, he described the secondary markets, where the securities initially placed are traded.
He also mentioned the liquidity mechanisms, the technology platforms Stock Exchanges have implemented to make transactions automated and allow instruments to be traded digitally thanks to dematerialization processes. The development of transactional software is a big effort of the Exchanges to become more efficient and competitive.
Mr. Arrieta described the “remote broker” figure, that functions as a capital market broker in both Stock Exchanges. Legal adjustments and agreements between exchanges, depositories, and regulators are necessary to implement this figure. Setting the “rules of the game”, making adjustments to the negotiation system, the clearing and settlement processes, aligning schedules, is a real challenge to make it operative. El Salvador Stock Exchange and Panama Stock Exchange have a 3-year cross-border successful negotiations.
Mr. Carvajal highlights the importance of the globalization of operations, to become cost-efficient. Valentin highlights the importance of being time-efficient and having access from other countries issuances.
Mrs. Aparicio elaborates on the importance of updating and transition to the new economic models of the 21st century, in topics as Sustainable Finance. Stock Markets are reviewing and developing environment, social, and governance models due to the change from traditional investing coming from millennial investors that are more focused on investing in products & services that address the real needs in the world.
Mr. Argüello adds crowdfunding, factoring, big data, online education, automation of activities, risk management, cyberattacks, and fintech are important matters to be taken care of in our markets.
To finalize the session Maricruz explained the work that has been done in AMERCA:
“We conformed Committees represented by a minimum of one executive of each Exchange, and we discuss the strategic plans of each one, in terms of regulation, compensation, public relations, etc. This way we develop initiatives with a regional view than can benefit the sector.
The members of AMERCA have joined motivated by common objectives: expand business network, share values, obtain more sources of financing. Their vision is to follow processes of securities negotiation between countries, through integration models, more efficient correspondent agreements letting capital flow move more easily”.
Mr. Argüello concludes by expressing the deep spirit of cooperation between regional exchanges, members of AMERCA and their participants to achieve the objective of making our markets, businesses, advisors, brokers, and all market participants grow, so we can all go beyond the borders and be able to reactivate our economies affected by the current pandemic.