The MILA bourse, which integrates the stock exchanges of Colombia, Chile and Peru, could see higher volume next year despite its weak debut in May, stock brokers from the region said.
MILA, which cross-lists shares of companies listed in the three countries' bourses, has generated only about $3.8 million in additional volume since it started, according to Chile's stock exchange.
Technical snafus and worries over different tax rules caused early hiccups. More recently, volatile global markets have made new investors cautious.
But strong economic growth in Peru, Chile and Colombia should help attract more capital to MILA over the longer-term, brokers say.
"We believe at the pace we are going, halfway through next year we should start seeing higher volumes," Daniel Velandia of Colombia's Correval brokerage told Reuters.
MILA is the region's second largest market after Brazil in terms of market capitalization, at $691 billion, and the largest in Latin America in terms of the number of companies listed, 565.
For some, it's time to consider opportunity buys as the Lima , Santiago and Bogota bourses have fallen an average of 13 percent so far this year, in line with volatility of global financial markets.
"One recommendation is to start buying, now is a good time. The three bourses are undervalued," said Jorge Monsante, general manager of Peru's Credibolsa.
Others say the sound economic fundamentals of Chile, Peru and Colombia, which were all able to recovery quickly from the 2008 global financial crisis, favors the MILA project.
"It's no secret that Chile, Peru and Colombia are the best performing economies in Latin America, and whenever the problems of the global economy are resolved, we will see substantial capital inflows to the region, probably through the MILA," said Velandia.
Colombia's economy is expected to grow 5 percent in 2011, while Chile and Peru are both seen expanding 6.5 percent.
While Chile's bourse has the most liquid market and is the most diverse in terms of companies listed, the three indices are thought to be complementary.
Around half of Peru's bourse consists of mining stocks, while Colombia's is dominated by energy companies and Chile's represents many retail and service companies.
"Our clients are showing more interest in learning about Peruvian or Colombian companies, knowing where to invest, and what the advantages are, and this shows that in 2012 we could see an upward trend the MILA," said Pamela Auszenker, the assistant manager of equities at brokerage BCI of Chile.
Reuters.
