NewsWhore
04-30-2009, 03:10 PM
Bank credit, widely held to be the traditional resource strength for the creation, development and expansion of business and the productive sector in general, is not sufficient for the current needs of the marketplace. Marcos Troncoso, the president of the Dominican Republic Stock Market (BVRD), made this statement after pointing out that there is absolute dependence on bank credit, since of RD$305 billion, only RD$11 billion, barely 3.5%, went from the capital markets into corporate bonds.
In his judgment, this dependence is due to the fact that the stock market has not developed in the country, especially in regards to the sale of shares in companies. He said that the lack of resources that is the current situation is not from the demand, but rather because bank credit has to comply with many restrictions in order to protect depositors' interests.
During his contribution as guest speaker at the American Chamber of Commerce (AmCham) monthly luncheon, Troncoso said that bank credit is not sufficient and should be complemented by a stock market that is a real instrument for development. At the same time, the productive sectors should be allowed to access resources by means of issuing fixed income instruments such as corporate bonds and share offers.
He also mentioned the creation of capital risk funds that in their different versions can invest in businesses in the productive sector according to their level of development. Troncoso said that four conditions have to be in place in order for a country to have a stock market that becomes a real instrument for national development. One of these is to increase the volume of transaction on the stock market. Another would be to modify the law on stocks and shares and the article 99 of Law 87-01 on pension funds and execute a program of creation of businesses and the capital risk fund industry.
Troncoso added that it is necessary, in the short term, and with the necessary regulatory controls, that the negotiation of instruments offered to the public should be done through the Stock Market, or from a platform administrated by the Stock Market, with the aim of reaching the volume that leads to the formation of prices, an earning curve and total transparency.
He added that the Stock Market needed to be a model of liquidity, transparency and trust in order to build confidence and attract investors.
Troncoso proposed an alliance between the public and private sectors with a view to setting up a business creation program as part of the social programs and the principal support in the fight against poverty.
For his part, new AmCham president Alejandro Pena Prieto said that despite the crisis, he believed that this was the right time to continue making efforts aimed at developing a capital market. He pointed out that experience shows that countries that have developed their capital markets have enjoyed sustained economic growth rates and greater and more influential development.
More... (http://www.dr1.com/index.html#8)
In his judgment, this dependence is due to the fact that the stock market has not developed in the country, especially in regards to the sale of shares in companies. He said that the lack of resources that is the current situation is not from the demand, but rather because bank credit has to comply with many restrictions in order to protect depositors' interests.
During his contribution as guest speaker at the American Chamber of Commerce (AmCham) monthly luncheon, Troncoso said that bank credit is not sufficient and should be complemented by a stock market that is a real instrument for development. At the same time, the productive sectors should be allowed to access resources by means of issuing fixed income instruments such as corporate bonds and share offers.
He also mentioned the creation of capital risk funds that in their different versions can invest in businesses in the productive sector according to their level of development. Troncoso said that four conditions have to be in place in order for a country to have a stock market that becomes a real instrument for national development. One of these is to increase the volume of transaction on the stock market. Another would be to modify the law on stocks and shares and the article 99 of Law 87-01 on pension funds and execute a program of creation of businesses and the capital risk fund industry.
Troncoso added that it is necessary, in the short term, and with the necessary regulatory controls, that the negotiation of instruments offered to the public should be done through the Stock Market, or from a platform administrated by the Stock Market, with the aim of reaching the volume that leads to the formation of prices, an earning curve and total transparency.
He added that the Stock Market needed to be a model of liquidity, transparency and trust in order to build confidence and attract investors.
Troncoso proposed an alliance between the public and private sectors with a view to setting up a business creation program as part of the social programs and the principal support in the fight against poverty.
For his part, new AmCham president Alejandro Pena Prieto said that despite the crisis, he believed that this was the right time to continue making efforts aimed at developing a capital market. He pointed out that experience shows that countries that have developed their capital markets have enjoyed sustained economic growth rates and greater and more influential development.
More... (http://www.dr1.com/index.html#8)