A look at the evolution of the Chilean capital market

head nov 03 2018

In 2018, the Depósito Central de Valores (DCV) celebrates 25 years of history in the Chilean capital market as the only entity responsible for safeguarding the instruments that are traded in the local market. In addition, it is in charge of registering transfer operations of instruments carried out in stock exchanges and in the over-the-counter market.

That is, DCV’s statistics reflect the market’s evolution. To analyze this growth, the Company prepared a report that shows how the portfolio has varied (which is reflected in the custody levels) and in the operations of investors, which have bought and sold financial instruments in the country since 2000 up to today.

If you want to download the full report, click here. Some data of the study:

a) Investment portfolios in the Chilean capital market

national investments portfolio evolution in millions uf (*) figures up to june of 2018

001

  • The amount of the investment portfolio of investors in domestic assets reaches, as of June 2018, 9,119 million UF (more than USD 382 billion), which implies an increase of five times its value in the last 18 years (an increase of 402%).
  • By category, fixed-income instruments (IRF) are still preferred by investors (45.42%), although they have lost weight relative to equity (IRV) and financial intermediation instruments (IIF), which today represent 34.30% and 20.29% within the investment portfolios.
  • By type of instrument, shares remain among the five preferences in the investment portfolios during the period analyzed, while in 2001, term deposits appear. Adjustable promissory notes with coupons (of the Central Bank), letters of credit and recognition bonds began disappearing in the principal local investments, being replaced by bank and treasury bonds, corporate debt (or debentures) and mutual fund quotas.

b) Operations in the Chilean capital market

volution of the no. of asset transactions in the local market

002

  • The registration of operations related to domestic assets in the local market has increased fivefold in the last 18 years: in 2000, 692,844 purchases and sales of instruments were recorded, while by the end of 2017, operations totaled just over 3.9 million. Regarding the total amount of domestic asset operations in the local market, this has increased 18 times in this period: going from 3,179 million UF (about USD 133 billion) in 2000 to 57,900 million UF (USD 2,426,628 million) in 2017.
  • By category, there is a significant increase in the number of financial intermediation instrument operations, which went from representing 7.48% of the total in 2000 to 43.34% during the first half of 2018. Equities, meanwhile, represented 43.38% of the operations as of June of this year, while fixed income reached 13.29%. When analyzing the amounts, they are mainly concentrated in financial intermediation instruments, although their weighing has decreased from 66% to 46.4% of the total. The highest growth, meanwhile, is recorded in equities that rose from 9.5% to 21.2% of the total.
  • By type of instrument, shares and term deposits currently account for more than 80% of the number of operations in the Chilean capital market. 18 years ago, shares only represented 62.1%, followed by recognition bonds and letters of credit (these two today have a low level of operations). By amount, the Central Bank’s adjustable promissory notes accounted for more than 55% of the operations in 2000. 18 years later, these assets are no longer bought or sold. Instead, term deposits, treasury bonds and debt mutual fund installments account for almost 75% of operations in the local market.

For more information on the DCV visit www.dcv.cl and LinkedIn

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