Lilian Rocca - inPERU

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inPERU London roadshow 2012

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Lilian Rocca - inPERU

  1. 1. Lilian Rocca CarbajalCHAIRMANSuperintendency of the Securities Market – SMVApril 2012Peru, Financing/InvestmentOpportunities in the Capital MarketsROAD SHOW – LONDON 2012
  2. 2. Peru´s Capital Market: A competitive and attractive market withinvestment and financing opportunitiesAttractiveCapitalMarketContinuity inmacroeconomicpolicy andpolitical stabilityStrongeconomicgrowthExchangerates andprice stabilityAppropriateand flexibleregulatoryframeworkIntegrationwith othermarkets inthe regionThe growth of the capital market has aided not only to fulfill the increasing financing needs ofthe Peruvian entrepreneurial sector but also to offer attractive investment alternativesthat allow for portfolio diversification
  3. 3. Agriculture2.0%Banking andfinancialservices56.1%Electricity8.8%Retail6.0%Insurance4.0%Communications5.5%Securitization15.0%Other2.5%Public Offerings by Economic SectorsA more dynamic alternative source of financing for companies in PeruThe Peruvian Capital Market: Public OfferingsMore than 60 companies haveoutstanding debt instrumentsSingle issuances of more than US$ 400million or with maturities up to 25 years2,0003,0004,0005,0006,0007,0002002 2004 2006 2008 2010 Feb.2012US$millionOutstanding Debt (Public Offering)US$6,300millionLast year public offerings contributedto finance activities in diverseeconomic sectorsSome companies financed theiroperations with very low interest rates(from 2.3% to 5.0%)Three companies has raised capital through theissuance of shares in the market (IPO) by morethan US$ 150 million in the last five years
  4. 4. New flexible schemes to reduce the time of registrationPublic Offerings: Main advancesE-prospectusAutomatic registration of short-termdebt instruments(electronic prospectus andissuance agreements)Rule 144 AAutomatic registration of internationaloffers issued under the Rule 144 A andpartially placed within the nationalterritoryPublic offerings through Rule 144-AUS$ 1,100 million in 2012Public offerings through e-prospectusUS$ 528 million in 2011This year several companies has raised capital from international markets:Volcan issued Senior Notes to raise US$ 600 millionCOFIDE issued Senior Notes to raise US$ 500 millionCementos Pacasmayo issued ADSs to raise US$ 256 million
  5. 5. The Peruvian Capital Market: Secondary MarketLima Stock Exchange (BVL):Average annual rate of return inthe last 10 years = 32%Market Capitalization has almostreached US$ 140,000 million(>70% GDP)BVL provides diversification benefits to investors coming from developed countries.The BVL offers greater returns than otherstock exchanges in the regionThe solid fundamentals of the economyand the favorable outlook for Peruviancompanies generate good perspectives forthe development of trading volumes inthe secondary market-20,00040,00060,00080,000100,000120,000140,000160,000180,000-5,00010,00015,00020,00025,0002002 2003 2004 2005 2006 2007 2008 2009 2010 2011US$MillionIGBVL(Dec1991=100)Lima Stock ExchangeMarket CapIGBVLIGBVL(Peru)IPSA(Chile)BOVESPA(Brasil)MERVAL(Argentina)IPC(Mexico)S&P 500(USA)19.8%11.3%13.2%7.9%4.8%10.9%AccumulatedReturnsJanuary - March 2012
  6. 6. 0.03.06.09.0Chile inColombiaChile inPeruColombiain ChileColombiain PeruPeru inChilePeru inColombiaUS$MillionTradedamounts in MILAMay 2011 - February 20128085909510001/01/201208/01/201215/01/201222/01/201229/01/201205/02/201212/02/201219/02/201226/02/201204/03/201211/03/201218/03/2012S&PMILA40(30May=100)MILA IndexMILA MarketGREAT POTENTIAL FORDEVELOPMENTThe MILA is the Latin America’s largesttrading venue by numbers of listings(550) and second largest by market cap(US$ 706 million)The good performance of all the threemarkets that comprises the MILA hasled to an increase of 18.5% in the S&PMILA 40, despite the global economicuncertaintyThree Countries, One Market
  7. 7. 0.0020.0040.0060.0080.00100.00120.00140.00160.00180.00jun-08ago-08oct-08dic-08feb-09abr-09jun-09ago-09oct-09dic-09feb-10abr-10jun-10ago-10oct-10dic-10feb-11abr-11jun-11ago-11oct-11dic-11feb-12IGBVL IBGCSecondary Market: Main advancesThe Office of theInvestmentOmbudsmanInvestors’Complaints andClaimsResponsibilitiesof the MarketDirectorMarket AbusivePracticesBuild investors´ confidence to encourage liquidity and deepeningPercentage increase of theGood Corporate GovernanceIndex (IBGC) versus IGBVL(Base: June 2008)As of march 2012, the IBGC has a spread of21.2% over the IGBVLCorporateGovernanceCode
  8. 8. The Peruvian Capital Market: Mutual FundsImportant investment option for retail investorsTo date, 56 different mutual fundsoperate in our capital market.These mutual funds offer differentalternatives for investors according totheir risk profiles050,000100,000150,000200,000250,000300,00001,0002,0003,0004,0005,0006,0002002 2003 2004 2005 2006 2007 2008 2009 2010 2011NumberofunitholdersNetAssetValue(MillionUS$)Mutual FundsNAV Unit HoldersIMPRESSIVE GROWTH OF MUTUAL FUNDSTotal Net Asset Value exceedsUS$ 5,300 millionMore than 270,000 unit holders inDecember 2011In the last 10 years, Mutual Funds has increased atan average annual growth rate of 16%Mutual funds are primarily invested indebt instruments (almost 90%)Shortterm46.3%International0.3%Debt39.5%Mixed9.4%Equity4.6%Mutual Funds PortfolioMarch 2012
  9. 9. -1,0002,0003,0004,0005,0006,000-5,00010,00015,00020,00025,00030,00035,0002002 2003 2004 2005 2006 2007 2008 2009 2010 2011NumberofMembers(inthounsands)PensionFunds(InUS$Million)Private Pension FundsFund ValueMembersThe Peruvian Capital Market: Private Pension FundsAverage annual growth of Pension Fundsreached 26% over the last decadeMajor institutional investors in the Peruvian capital marketPension Funds are primarilyinvested in securities issued bythe private sector (40%)Net Asset Value surpasses US$ 30,000million (8 times the amount registeredten years ago)Almost 5 million members participatein the Private Pension SystemPublic Sector,17.0%FinancialSystem, 14.4%Private Sector,40.1%Foreignsecurities,28.5%Pension Funds PortfolioDecember 2011A solid base of institutional investors, including Mutual Funds, Pension Funds, Banks andInsurances (more than 30% of GDP) has been the catalyst for the development of thePeruvian capital market
  10. 10. The Peruvian Capital Market: Future actions by the SMV “My first Public Offering” Program Special regulation for Small and Medium Enterprises (SME) offerings Listing of State-Owned Enterprises Promoting e-prospectus for long-term debt instrumentsNext steps in the Primary Market Alternative trading market for securities issued by Small and Medium Enterprises Direct Market Access Strengthening of the MILA On-line supervision of Broker-Dealers Regulation of Takeovers Regulation of short-term profits realized by Directors and ManagersNext steps in the Secondary Market
  11. 11. Final Remarks Peru’s main macroeconomic indicators denote sound fundamentals. The Peruvian capital market offers interesting investment opportunitiesand financing alternatives. Major local institutional investors play a fundamental role and provide forstability in our market. The SMV will continue to work on promoting public offerings as well as agreater degree of liquidity and deepening in the secondary market.

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