Paraguayan Stock Market: Modernizing local business models

By Hugo Alexander Berkemeyer, Berkemeyer Attorneys & Counselors

Recent reports are showing increase of 172 % of the value of registered shares between the years of 2012 and 2013 in the paraguayan stock market. This high number shows a change of mind for companies and people taking a chance in the local market and economy.

Who would have thought before 1998 that Paraguayans would invest in the stock market, buying and selling stocks and bonds and smelling the air of Wall Street? Few people.

But customs change and business models, too. Some solidify and consolidate, while the demands of the XXI century continue to rise. The Government´s role is to support those systems that will pay off both, the general public and the private investor, national or foreign.

In the late twentieth century, the Stock Market (Law 1284/1998), made was created through the National Securities Commission (CNV), an agency of the Ministry of Industry and Commerce (MIC). This creation combined business and legislative technicality, stating that the stock customs and habits are to be applied supplemental to laws and rulings governing the securities market .

Years have passed and in the latest report published in February 2014, the CNV reported the existence of: 40 Corporations of open capital, 1 Manager of Mutual Funds, 1 Stock Exchange, 7 Brokerage Houses, 10 Stock Operators, 38 External Auditors, 31 Corporations issuing stock and 4 Rating Agencies.

It was also reported that during that month six Programs of Global Issuance where recorded for a value of Guaranies 58 billion, which constitutes an amount demonstrating the strong stages put into this bargaining model.
     
The year of 2013, registered shares with a total value of G. 431 billion ( about 97 million), which represents 172% increase of that recorded in the same period of 2012.

But if something goes to show the projected change of mentality is this fact: in February 2013, the fixed income securities (TRF) registered with the CNV amounted to the sum of Gs. 15 billion, a year later, that amount jumped to Gs. 58 billion.