The main securities exchanges in Chile, Colombia and Peru plan to begin trialling cross-border stock trading in an arrangement that may lead to the creation of Latin America’s second-largest bourse by market value.
The three exchanges, which signed Tuesday a definitive agreement in Lima, will begin testing with brokerages on Nov. 22 in a system known as MILA, they said in an e-mailed statement.
In a second phase the three countries may establish a common exchange in a bid to increase trading volume and lure more foreign investors. The combined market value of the three bourses is 657 billion US dollars (around 560 companies) compared with Mexico’s 464 billion and Brazil’s 1.5 trillion, according to data compiled by Bloomberg.
There is “no horizon” yet for direct trading on each exchange, Colombian Securities Exchange President Juan Pablo Cordoba said.
“From now on, the equity markets of Peru, Chile and Colombia will become one thanks to the integration of their stock exchanges” said Peru’s stock exchange president Roberto Hoyle.
A meeting of financial experts headed by Spain's BBVA Bank in Bogotá on Friday said the new stock market will boost overall trading in the three countries anywhere from three to five times the current volume.
'That would make this stock market the second-largest in Latin America after Brazil's,' BBVA said in a statement.