LatinFinance - January/February 2017 - 41

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ISS UE

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fae & oil
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SP n de

LOCAL MARKET
LIQUIDITY

NO. 252

o

Local market borrowing is a staple for companies and banks in Latin America
and the Caribbean. But a lack of liquidity is a hindrance for many.
BER /
NOV EM
6
BER 201

DEC EM

MEXICO

URUGUAY

Mexico has tackled the problem by
opening the way for local-currency
securities to trade over the Euroclear
corporate to take advantage of the new
format with a February 2015 issue
that raised 24.3 billion pesos

g
Changins
season

COLOMBIA

2013

3%
23%

2016

"

ing for
is prepar
How Itaú agement, new
new man rs and a new
ito
compet
y
econom

MXN
$24.3B
($1.6 B at the time)

Uruguay has considered the euroclearable format but has instead
turned to other strategies to facilitate foreign participation locally,
such as an open FX regime and a friendly tax regime. "We started
talking to Euroclear. But when you open up, you open up," says public
credit head Herman Kamil
Uruguayan sovereign debt issued in local and international markets
(% of total issued)

7x

2005

INCREASE

2008

22%

78%
2012

2016

DEBT TRADING

70%

74%
local

€

WHY LOCAL CURRENCY?

Euroclearable or not, local market securities in some
Latin American markets are heavily traded. Indeed,
Mexican local instruments are among the most-traded
across the emerging markets. Other countries, like
Argentina, are gaining ground- but still have
a long way to go.

26%

30%

"We've had massive portfolio investment in the past couple
of years, investors coming to our local currency treasury
market. Three years ago, 3% of our treasuries were in the
hands of foreign investors. Now it's 23%. It's a big change.
trust the economy is managed responsibly."

16%

84%

The importance of being able to borrow in
local currency is clear when you take a
quick look at how regional FX has shifted
against the dollar in the past three years.

¥

£

BRA

2013 MEX$ 13
2016 MEX$ 20

BRAZIL

$1
US D

$172b

WAY
S THE
LEAD
ZUELA
ANCE
VENE
CROFIN
G ON
IAN MI T * BETTIN
BOLIV
RISH * COMMITMEN AWARDS
OU
FL
E
CHS
E YEAR
GRAD
S FINTE
OF TH
MENT
BRAZIL' AS' INVE ST US: BANKS
l
reetria
EN
PL
e.com/f
CÁRD
www.l

atinfin

MEX

$

MEXICO

+53.85%

2013 R$ 2.4
2016 R$ 3.2

+33.33%

ARG

Life
after
$50

foreign

Trading in local instruments Q2, 2016

$28b $89b

COLOMBIA

+57.89%

OL L A R

+21.43%
+134.4%

2013 COL$ 1,900
2016 COL$ 3,000

CUBA
JOAQU
COME
IM LE
S CLOS
VY
ER * AR
PENSIO 'S TOUGH
GENT
TASK
INA'S
N FUND
PO
S' PRIVA -LIST * MA
URICI ST-ELECTIO
TE EQ
N PR
REPO
UIT Y BID O CÁRDEN
RT: IN
AS ON OSPECTS
* PE
VEST
DIVER
ING IN TROBRAS'
WAY FO SIFICATIO
ECUA
N
DOR
RWAR
www.la
D
tinfina

PERÚ
2013 S/ 2.8
2016 S/ 3.4

ARGENTINA
2016

$ 15

2013

$ 6.4

Mar-Apr

Cov
erFinal.i
January/February 2017- L ATINFINA
NCE.COM
27

ndd 1

anc

10/14/16

LocalCapitalMarktsArgentina.indd 27

ISSU E
NO. 242

nce.com

/freetri

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2:07 PM

1/3/17 10:43 AM

3/5/15

12:08

PM

d 1
inal.ind

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Nov-De

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