LatinFinance - January/February 2014 - 24

screen that brokers in the four countries
can use to deal shares in each market is,
fundamentally, a "good idea."
Just an image thing?
even the harshest critics of the market
agree that mila is, at the very least, helpful
to the region's image.
"from a marketing point of view, mila
has been very good," says a Santiago-based
investment banker who is nevertheless
critical of the platform. "We now have an
S&P mila 40 index, an exchange-traded
fund that tracks the index. there have been
a few mutual funds that have launched mila
funds. the concept of mila has been good
for the market, just as people would talk
about the Brics."
She adds that since her bank has
operations in the three countries, it trades a
lot across the markets-"but not through the
mila structure. We work with our chilean
clients in colombia and Peru; our Peruvian
clients operate in chile."
Yet it's precisely such results that are
a direct consequence of the mila project,
says Juan Pablo córdoba, chief executive
of the colombian stock exchange. mila, he
says, goes beyond being simply a trading
platform.
"the important challenge is that
investors in each of the three countries
become familiar with the stocks and the
investment opportunities available in the
other countries," he tells LatinFinance.
"and they will gradually incorporate that
in their portfolios. it's a long process, but
we're very optimistic.'
the value of the exchange goes beyond
the aesthetic: ancillary infrastructure across
the three countries has also advanced.
Since mila began operation, institutions
focused on the region have grown.
credicorp capital and larrainVial are two
examples of investment banks that are
particularly focused on the andean region.
others, like BtG, also have a presence
across the three markets.
"for the big global investors, chile, Peru
and colombia today make very interesting
investments," says Hugo Horta, capital
markets head at credicorp. international
buyers don't need the mila infrastructure to
buy shares, but they have started looking at
the three countries as a single unit, he says.
"the concept of mila has brought
together chile, Peru and colombia into
a single market. each is very attractive
to investors, but on their own they may
not have been big enough to position

24 l atinfina nce.com - January/February 2014

themselves as they have through mila."
Grupo Sura chief executive David
Bojanini says that mila also has "many
benefits" for institutional investors. "mila is
very important for pension funds," he tells
LatinFinance. "for diversification, it's very
important for pension funds in colombia to
be able to invest in Peru, chile and mexico,
and the other way around. if funds in the
region invest across the region, it will give
more liquidity to stocks, so this must be a
key strategy for institutional investors in the
region."

Pedro Zorrilla, BMV

"As we become
more efficient in
AttrActing investors' Attention
through this
mArket, we will
hAve greAter opportunities to
deepen its operAtions. there's more
opportunity As
pArt of milA thAn
outside it"

Size matters
the inclusion of mexico this year will
create latin america's largest bourse by
market capitalization, at over $1 trillion.
its entry has been a long time coming,
and passed a substantial hurdle in late
2013. the country's financial reform
legislation, approved by mexico's congress
in november, allows the stock exchange
to recognize share listings internationally
- something that had previously not been
allowed.
the move will broaden mila's scope, and
encourage a greater flow of investment,
says José antonio martínez, chief executive
of the Santiago stock exchange.
"mexico is the second largest market in
latin america after Brazil, which means it
will bring to mila greater liquidity, a larger
number of participants and, of course,
it will broaden the range of financing
options for our issuers, trading options
for our intermediaries, and the range of
instruments for our investors," martínez
tells LatinFinance.
"mexican companies are investing
heavily in central and South america,"
says carlos Valencia, partner at law firm
Dla Piper in mexico city. "they have
investments in all three mila markets. it
would follow that investment appetite
would be reflected not only in direct foreign
investment, but also as investors in listed
companies in those jurisdictions."
as one of latin america's two main
listings avenues, including mexico should
significantly increase its visibility in the eyes
of regional investors.
But there is much to be done before
mexico steps in. the cnBV, mexico's bank
and market regulator, is now working
with the stock exchange to determine the
appropriate regulation that must be in
place before the integration can happen.
that may not be until the second half of
the year. mexican stock exchange director
general Pedro Zorrilla tells LatinFinance
that it will depend on "secondary
regulation."
"i couldn't say [exactly] when it will be,
but i can say it will be 2014 - and it will be as
soon as possible. Hopefully we can cement
it before the end of the third quarter, at the
latest."
Yet despite criticism of mila, Zorrilla
still sees value in joining the exchange. "as
we become more efficient at attracting
investors' attention through this market,
we will have greater opportunities to
deepen its operation. So, regardless of the
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