PAOLO SOLIS LOAYZA
MARCH 04, 2009
Ecuador is a country where businesses are basically family companies that arein need of more capital to expand, this companies are big enough to go public in the Ecuadorian exchange market, but the lack of public information about the Bolsa de Valores of Guayaquil has made this tool to be ignored by companies with desires of expansion, and depend only in banking fundings that may take up to years to resolve.
By studying the processes and terms used often in BVG, and thecomparison to other exchange markets, will helps us detect the flaws in our system, and to project alternative solutions to improve the financial markets in our country.
The Exchange Market In Ecuador has not been exploited the way that could be since the creation of Bolsa de Valores de Guayaquil, since dollarization Ecuador has gain a little trust for foreign investing, meaning that nationalcompanies has to level up to foreign ones; in the need of capital, companies are looking for new sources money, being the exchange market one of the alternatives.
Having this established we will try to understand the management of the exchange market, specially nowadays, where the socialists ideologies are very involve in the day to day basis, to know how to take advantage of this without breaking theschemes the government is trying to implement in the country.
According to the web page http://es.shvoong.com/ in the ancient Rome there was a similar practice to the Exchange market. But until 1847, there was no specific place to make these transactions, being exchanged in the streets, and with no insurance or security at all, being a very risky way to invest your money.
The exchange markets inthe US, where not created until the XVIII century. Wall Street in New York was the exchange center in 1792. The New York Stock Exchange (NYSE), the North American Securities Dealers Automated Quotations (NASDAQ), and American Exchange (AMEX) are probably the most important exchange markets index.
There has been different crisis in different periods during the life of the exchange marketsbasically because a lot of stocks where owned by few inversionists, being all interconnected, when one crashed they all fell, resulting in countries economical crisis, reducing imports, exports and international loans, and by that
affecting the world economy; this is one of the main reasons the good management of this importantsector of
the economy is vital in macroeconomics studies.
Lately large corporations has dominated the world economies and has been globalized like Coca-Cola, IBM, Movistar, etc., to ease regular people, this corporations has created the possibility that almost anybody can buy stock. So people nowadays save a substantial part of their money to invest it in stocks, having now almost everybodyaffected if the market is going good or not.
In Ecuador after the big financial and economical crisis of 1999, where the banking freezing and the closing of important banks, the highest inflation in 10 years, exchange rate devaluated, among other things; in 2000 the country announced dollarization of the country; where a dollar was equivalent to 25000 sucres.
Because of dollarization, Ecuador hasreached macro economical stability, which has help in the last years to the decision making in the commercial field. Being reactivated little by little the necessity of projects and therefore the necessity of financing.
We have seen that since 2001 the emission of corporate debt in Ecuador has been incremented year by year in obligations, commercial paper and titles. In the year 2001 – 2006, the...