"We may be witnessing the redrafting of Latin America’s financial architecture," writes Andres Oppenheimer, a top commentator on Latin American events.
The merger of the New York and Frankfurt stock exchanges to create the world’s biggest stock market made big headlines this week, but there is a lesser-known process in South America that should also draw our attention — the union of the Chilean, Peruvian and Colombian stock exchanges.
The stock exchanges of the three South American countries announced recently that they have finished the regulatory paperwork to start joint operations, and that they are preparing to do so within the next few months.
The three-country stock market, known as the Integrated Latin American Market, or by its Spanish initials MILA, will be Latin America’s second-largest stock market, after Brazil’s.
In a telephone interview this week, Juan Pablo Cordoba, president of the Colombian Stock Exchange, told me that “there is a strong commitment by the three countries to get it started before the end of the first semester this year.’’ MILA’s launching date will be announced after an internal technical try-out session next month, he said.
The idea behind MILA is that, in an increasingly globalized world, where the biggest stock markets are merging, it will be increasingly difficult for medium-sized or small economies to attract investments unless they are part of a bigger financial market, Cordoba said.
In addition to the New York and Frankfurt stock exchanges, the London and Toronto stock exchanges have announced their own mergers, and the Singapore stock exchange announced in October that it plans to buy the Australian Stock Exchange.
While the economies of Chile, Peru and Colombia have grown steadily in recent years, they are small by international standards. By unifying their operations, they will make it easier for domestic and foreign investors to buy stock in each of the participating countries’ companies, thus increasing their corporations’ ability to sell their stocks and attract investments.