Capital Markets
From The Report: Peru 2016
View in Online Reader

The Lima Stock Exchange (Bolsa de Valores de Lima, BVL) has had a difficult three years in 2013-15, having become somewhat less active and less liquid than its peers. The market capitalisation of listed Peruvian companies was worth 38.9% of GDP in 2014, according to the latest available comparable figures from the World Bank – ahead of Mexico (37.1%) and Colombia (38.8%) but behind Chile (90.4%). However, at only 1.8% of GDP in 2014, the BVL lagged behind in terms of the total value of shares traded, compared to Colombia (5.5%), Mexico (11%) and Chile (10.5%). During 2015, the BVL’s General Index was consistently down on year-earlier levels and by September it had slumped to 10,030, a fall o 38.2% y-o-y. Nonetheless, market players believe conditions point to a recovery in 2016, as the macroeconomic environment improves and investment returns to the region, encouraged by the strength of the US dollar relative to Latin American currencies. This chapter contains an interview with Christian Laub, President, Lima Stock Exchange.

Articles from this Chapter

Overview

Tough times: Reforms under consideration are likely to increase liquidity and trade volumes
OBG
plus

The Lima Stock Exchange (Bolsa de Valores de Lima, BVL) has had a difficult three years in 2013-15, but market players believe conditions are beginning to point to a recovery in 2016. In terms of its importance to the wider economy, the BVL is comparable to bourses in other neighbouring countries. However, in recent years it has become somewhat less active and less liquid than its peers. The market capitalisation of listed Peruvian companies was worth 38.9% of GDP in 2014, according to the latest…

Interview

Taking steps: OBG talks to Christian Laub, President, Lima Stock Exchange (Bolsa de Valores de Lima, BVL)
OBG
plus

Interview:Christian Laub What are the main challenges to increasing liquidity and trading volumes on the exchange? CHRISTIAN LAUB: First, the BVL is a market that relies heavily on mining, a sector where market capitalisation has a high degree of dependence on external variables, namely the prices of commodities. This is why in recent years, the decrease in liquidity was caused not only by a volume effect but also by a price effect. Volumes have decreased mainly because economic deceleration…

Analysis

Tax relief: Certain transactions are now exempt from capital gains tax
OBG
plus

Before September 2015, all share transactions on the Lima Stock Exchange (Bolsa de Valores de Lima, BVL) attracted a 5% tax on capital gains. The tax was disliked by market players, who suggested that it be repealed. But the authorities did not take action until low liquidity levels threatened to have the BLV downgraded from emerging market to frontier status. Critic Critics of the tax had argued that it offered a “perverse incentive” to reduce liquidity levels on the BVL. They pointed out…