The Business Year

Denisse Medina

General Manager, Valores León

Guillermo Arancibia Krumm

Country Manager, JMMB

How have the capital markets in the Dominican Republic evolved over recent years? DENISSE MEDINA Capital markets work essentially for the development of a country, by allowing the financing of […]

How have the capital markets in the Dominican Republic evolved over recent years?

DENISSE MEDINA Capital markets work essentially for the development of a country, by allowing the financing of every main sector of the economy, and so for us it is very important the Dominican Republic’s capital markets see continued development. It all started in the early 1990s with the creation of the Stock Exchange of the Dominican Republic Bolsa de Valores de la República Dominicana (BVRD), but it was not until 2000 that the law was approved and the regulator, the Securities Superintendency, was created. The first issues began in 2005, once all legal requirements had been met. Government issues from the Central Bank are what have helped investors the most thus far, and now what we really require is other companies willing to seek funding via the capital markets, which has been quite difficult. Most Dominican companies are family-owned and transparency is a rather alien prerequisite to being listed for them to grasp. In recent years the market has been highly liquid, and this liquidity has enabled bank financing without needing to go down the listing road with the BVRD. The SIV has been attempting to create a program with which to promote the capital markets in the industrial sector. The BVRD recently held an event in November where we met companies from beyond the country, such as Argentina, Panama, and some others to hear their experiences and successes in the capital markets.

GUILLERMO ARANCIBIA KRUMM This is a new market where the potential applications of capital markets services are not well known. It is easier to take out a loan than to hold an IPO or provide debt insurance, as people are simply unaware of the possibilities. Providing education on the market is a joint effort, and the responsibility should be borne by all players involved, although many do not see it this way. The stock exchange and its watchdog SIV play a major role, in partnership with certain other government entities. It is important for these entities to continue to support the educational process in this joint effort. Their core responsibility is to support business, to create a new approach, and to be present at the center of the sector. In the market, where a certificate of deposit is obtained from a bank, money must be withdrawn at another bank before maturity. It would be better to have a market where all parties combine to share experience, products, and prices, both in terms of liquidity and debt opportunities.

What is the profile of customers that partner with your company and what is your competitive advantage over other brokers?

DM Our clients fall into two types, the institutional and the retail client. Our strategy is to develop the retail segment, as it is always more difficult to work with this segment because it comprises a higher volume of clients, with a lower volume of money. Ultimately, we understand that what we need to do is amass a large base of clients in order to fund the development of Dominican companies over the coming years. To this end, most of our customers are from the retail side. We were one of the first brokerage houses in the Dominican Republic and we have always been focused on developing the retail market.

GAK Our competitive advantages are our experience and strong cultural diversity. Basically, what differentiates us most from our competitors is our internal culture. The warm and caring manner in which we treat our shareholders, and our employees, is transferred to our clients. We believe that a happy and highly motivated company has a better chance of retaining its clients. We serve diverse clientele and segments in different markets without discrimination, as our main strategy is to balance risk. We share the risk based on market opportunities, but try to balance it. We are also working toward becoming a financial group and hope to acquire a bank in the short term.

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