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Content publication date

April 26, 2011

Colombia, Peru and Chile have approved plans to merge their respective stock exchanges this year, with the goal of enhancing economic growth through the unification of strategic markets. The initiative of the Integrated Latin American Market (Mila, or Mercado Integrado Latinoamericano) will become functional by the end of 2011, creating the second-largest stock exchange in Latin America, behind only Brazil.

The Integrated Latin American Market (Mila) created by Colombia, Peru and Chile is a strategic integration by the three emerging Latin American powerhouses to create a strong, efficient and competitive regional market for investors. Originally initiated in 2009 and recently approved, the Colombian-Peru-Chile stock market merger will take place by the end of 2011 and will join the complementary markets to drive economic growth for all three countries.  Since the stock market of each country is based on different economic sectors, integration will diversify the exchange and create new opportunities for investors.

As the markets become more integrated, the eventual, full consolidation will lead to a market capitalization totaling $470 billion, with 51.2 percent coming from the existing Chilean market, 34 percent from Colombia and 15 percent from Peru, placing it second in Latin America. The unified market will strengthen the financial market, giving investors the advantages of economies of scale and scope, while yielding market capitalization and trades of a transnational level. 

As was the case in Europe, regulatory standardization and flexibility is necessary for a successful integration moving forward. In the next couple of years, the Integrated Latin American Market will seek to establish regulations and trading systems, increasing liquidity and number of securities available. The markets will provide greater opportunities for companies to secure financing and investors to find new opportunities in a diversified portfolio. Once the consolidation is successfully completed, the countries hope to unite with other important financial markets in the region, such as those of Brazil and Mexico.

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