Panama Stock Exchange

By Juan Carlos Martinez


Last year was a very strong year for the Panama Stock Market. The Panama Stock Exchange although small in terms of transaction numbers and participants, it showed a percentage growth of 61.35% versus 2009. In 2010 the total negotiated value of the Panama Stock Exchange was $2,639 billion whereas in 2009 it closed with a total negotiated value of $1,635 billion according to an official press release form the Panama Stock Exchange. This is the largest negotiated value since the Panama Stock Exchange began operating 20 years ago.

The increase in transaction volume is attributed to an 82.6% increase in the volume negotiated in the primary market as a result mainly of the Treasury Note program renewed by the government, corporate bonds, preferential shares and the increase in Negotiable Commercial Values. The market capitalization of the companies listed in the Panama Stock Exchange has also grown very strongly. In 2000 the market cap was $2,974 billion whereas at the end of 2010 the market cap was $8,849 billion, a 287% growth in a decade.

The Panama Stock Exchange offers the investor both debt instruments such as bonds and notes, as well as corporate stock. In the primary market, meaning first issue instruments or IPO'S, which in the Panama Stock Exchange could be bonds or shares. Bonds were the indisputable stars of last years transaction volume, with transactions totaling $539.8 million by mid December 2010, followed by Treasury Notes with a transaction volume of $471 million.

In the secondary market, meaning the market where you can buy and sell titles already in circulation, shares were the biggest movers with a transaction value of $59.2 million followed by preferential shares with a transaction value of $37.2 million.

The Panama Stock Exchange has only 22 registered companies that trade their shares publicly on the market. Of these 22, 12 showed high growth patterns in terms of their share value, three showed a decrease and the rest did not show any variation at all, making the overall performance of publicly owned companies a positive one. The biggest jump in share price was by Latinclear, followed by GB Group, the holding company of Banco General and subsidiaries, then MHC Holdings, FASA, Rey Holding and Empresa General de Inversiones, however none of these corporations are planning to issue additional shares as reported by their lead executives.

As mentioned many of the companies registered in the Panama Stock Exchange are there not to trade their shares publicly but to seek funding through debt instruments such as bonds or Negotiable Commercial Values. Two companies that have already announced their intentions to seek funding through the Panama Stock Exchange are Cochez y Cia, S.A. And Odin Energy Corporation. Cochez y Cia, a large construction materials supplier, is planning to build three new stores this year and will seek mixed funding options for this expansion: traditional bank financing, internal cash flow and an issue in the local stock exchange, although they still have not decided what type of issue.

Odin Energy Corporation is planning to expand its oil refinery and to acquire its own fleet of oil tankers. The tanker fleet acquisition project is planned through a debt instrument issue in the Panama Stock Exchange. It also registered a common stock issue in December. Odin is an energy company which produces a mixture of diesel and biodiesel in Santa Marta, Colombia.



Copyright© 2011, Pan Am Publishing S.A., Republic of Panama