MILA, a new investment and finance opportunity in Latin America
Latin America has recently undergone a process of stock exchange integration the like of which has never been seen before, giving rise to the Latin American Integrated Market, MILA, made up of Colombia, Chile and Pere, soon to be joined by Mexico.
For the first time ever, the stock exchanges of three different countries have joined forces without the need for the merger or corporate integration of their respective securities markets. The process has been implemented with the use of IT tools and the harmonization of the different countries’ legislations, as part of a process that first began to bear fruit back in 2011 and which has the aim of creating the region’s most attractive stock exchange.
Trading on the MILA, investors from any of the member countries can purchase securities registered in any of the countries comprising the integrated market, directly, in their local currency and using financial institutions from their respective countries. Thanks to the MILA, investors will not find it easier to diversify their portfolios and access new issuers. As far as the issuing companies are concerned, the MILA will enable them to access regional finance on the securities markets, without the need to expedite procedures to register on international exchanges or provide information to foreign authorities.
When an issuer registers on any of the securities markets of any of the member countries, its shares can automatically be acquired via the stock exchanges of any of the other countries making up the MILA. Investors from any of these countries will therefore be able to acquire shares from the issuer in question. There is no need for any further registrations or additional procedures in order to offer or acquire such securities in any of the MILA-member countries.
As things stand, the MILA is the Latin American market boasting the largest number of registered issuers (554) and the second highest market capitalization (€480 thousand million) after the Brazilian stock market. With the arrival of Mexico in 2014, the number of issuers on the MILA is expected to rise to 690, while the overall market capitalization is expected to hit the €880 thousand million-mark.
At a time when the more mature international financial markets are undergoing a slump, certain investors are seeking to maximize the return on their outlay by training their sights on emerging countries. This trend has played into the hands of the securities markets in Latin America and represents an additional opportunity for companies seeking finance, above all those with a presence in any of the MILA-member countries.
Garrigues Latin American Practice