Panama: Country and Foreign Investment
Since its creation in 1990, the Panama Stock Exchange has been an important part of the development of Panama's role as a regional financial centre. Most transactions centre on government bonds. The exchange is the only dollar-based securities market in the region. The main corporate candidates for listing are the many companies of Central America and the northern countries of South America that have strong balance sheets but are too small to issue shares in New York. There are about 100 companies listed on the exchange.
The exchange experienced growth of 27.5% in 2011 when business totaled US$3.365bn for the year. Trading in the primary market reached US$2.132bn in 2010, an increase of 82.68% over the previous year. The secondary market was also active, with transactions worth US$366.4 million and growth of 61.66%. Trading of repurchases was at US$140.1 million, down from US$241.6 million in 2009. The market index closed the year at 261.84 points, growth of 14.8% over the year.
Bolsa de Valores de Panamá, S. A., (the Panama Stock exchange) is a corporation organized under the Laws of the Republic of Panama. Its shareholder base is made up of the main local banks, including Banco Nacional de Panamá (National Bank of Panama) as well as commercial, insurance and industrial corporations and concerns, businessmen, professionals and stockbrokers.
There is a Board of Directors, made up of nine principals and nine substitutes. Additionally, five committees oversee the Panama Stock Exchange: the Executive Committee, the Technical Committee, the Trading and Internal Regulations Committee, the Stock Market Operations Oversight Committee, the Audit Committee.
The Panama Stock Exchange's operations are performed through qualified intermediaries who, with the PST's prior authorization, are entitled access to the floor when in session. These people, also known as stockbrokers, act on behalf of corporations which have bought seats on the Exchange.
Transactions can be cleared exactly three days after the transaction (t+3), or at Term whenever the parties agree to deliver the money or securities, or both, at a future date, within the limits set by the Board of Directors, notwithstanding the fact that the parties may decide to settle the operation before the expiration of the agreed term.
Electronic trading began to replace the open outcry system in 2003, and the Stock Exchange now operates an electronic trading system with remote trading terminals for all Stock Exchange seatholders. In certain special circumstances where the electronic system fails, the BVP has adopted open outcry trading norms for used on the Stock Exchange floor with a physical presence of the participants.