Looking at the Stagnant, Frustrating State of the Bolsa de Valores de Colombia (BVC)

My four years at the the Bolsa de Valores de Colombia S.A. (BVC) were frustrating years. There was a lack of forward momentum when it came to the equity markets in particular.

During an era when Mexico, Brazil, and Chile seemed to create headlines on a weekly basis, the BVC appeared to spend most of its time sorting out IT problems and creating headline products that added nothing to market volumes.

But the blame is far from theirs alone.

The lack of inertia was compounded by the Financial Regulation Unit (URF, Unidad de Regulación Financiera) and Superfinanciera Colombia, two entities absolutely jam packed with bureaucrats.

For example: The Mercado Global has stalled. Why?

Because these two entities have spent the best part of two years approving the BVC as a sponsor of the securities to be listed. Across Latin America, the stock exchanges are the primary sponsor of such listings, and in Mexico, Argentina, and Peru those international markets are booming.

In mid-November, Superfinanciera hosted a meeting of the usual market bobbleheads. Once again, it was a gathering that garnered little more than the same sound bites we have been hearing for years. Sadly, sat around the table were too many people who simply don’t have the market background to dig Colombia out of this problem.

As for Asobolsa, it continues to use the phrase “The Markets Are For Everyone” — this, from an entity that hosted an annual summit exclusively for those who had plenty of money to travel to Cartagena and drink cocktails. As a de facto leader of the capital markets, one wonders if people, outside of the boys club, think Asobolsa is still fit for purpose.

The last two years have seen endless headlines related to Nuam, the merger of the Colombian, Peruvian and Chilean markets as if it will be the panacea for a new Andean order. It won’t be — at least for Colombia. Despite being under the quality leadership of Juan Pablo Cordoba, there will be no impact on the equity market until 2025. What will be left of the COLCAP by then ?

Four immediate problems:

(1) Brokerage houses that find it more cost-efficient to force feed clients underperforming funds as opposed to equities.

(2) Entities such as Cititrust Holdings and BlackRock that could easily have helped open an equities stock lending and derivatives market — but instead chose to walk by on the other side.

(3) The aforementioned intransigence of Superfianciera and the URF when it comes to issues such as MGC and Crypto ETF listings.

(4) The sheer cost of trading. Remarkably the Autorregulador del Mercado de Valores de Colombia (AMV) component of your fees is higher than that of the BVC.

The good news recently came in the form of J.P. Morgan comments regarding the improvement in the prospects for Colombia not being downgraded to “frontier” status.

However, as we stand, it is a sliver of optimism amid a world of pessimism when it comes to the local capital markets.

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