MercoPress. South Atlantic News Agency

Venezuela stocks surge 124% a week after Maduro’s removal

Venezuela’s market is hindered by currency convertibility limits, bureaucratic registration requirements for foreign investors, and a widening black-market exchange rate gap

Venezuelan assets have surged in a dramatic fashion this week, with the Caracas Stock Exchange’s main index up about 124% in U.S. dollar terms, Bloomberg data shows, as global investors react to political upheaval after the removal of President Nicolás Maduro last Saturday by United States forces.

Local brokers report a notable uptick in inquiries from foreign clients seeking exposure to Venezuelan equities, driven by the belief that political shifts could unlock long-dormant value. Yet market participants caution that actual access remains deeply constrained by regulatory hurdles, limited liquidity — fewer than 40 listed companies — and Venezuela’s isolation from global financial systems.

“If one wanted to try to access Venezuelan assets, I’m sure one could find a way — but it’s very small,” said Todd Sohn, senior technical strategist at Strategas, speaking from New York.

The spike in trading activity occurs amid extraordinary geopolitical developments. A U.S.-led operation that resulted in Maduro’s capture has prompted a sharp rally in Venezuelan sovereign bonds traded internationally, with some issues climbing to their highest levels in years as investors price in the possibility of debt restructuring and renewed access to capital markets.

Despite this optimism, substantial obstacles remain. Venezuela’s market is hindered by currency convertibility limits, bureaucratic registration requirements for foreign investors, and a widening black-market exchange rate gap. Proposals such as an ETF tracking Venezuelan-exposed firms have been filed, aiming to broaden access, though their practical effect is uncertain.

These financial developments unfold against a backdrop of deeper economic stress. Additional reporting highlights that the bolívar has plunged sharply in parallel markets, and inflation fears are mounting, even as tentative diplomatic efforts are underway to restore ties with the United States.

 

With input from Reuters and Bloomberg.