Donald Cott Creus, executive director of the Bolsa de Valores de Santo Domingo (BVSD), the national securities exchange that began operations in December 1991, said that it expects the first share issue to be undertaken this year. So far, the Santo Domingo securities exchange has been transacting solely in commercial paper. Mr Cott believes a principal obstacle to selling shares in Dominican companies to the public is that family operations are traditionally kept very much under wraps and that does not guarantee the necessary transparency.
Reviewing the present situation of the exchange, Donald Cott Creus said that 89% of its transactions are commercial paper, with the remaining 11% being made up of Central Bank certificates, agropecuarian bonds, financial certificates or construction bonds. He said that 60% of the transactions are for 60-90 day terms, and 18% for 91-180 days.
He explained that the sector most favored by the exchange is the industry which was involved in 35% of the transactions, during the last four years, totaling approximately RD$286 million. Other areas benefiting from the exchange are the commercial sector with 34%, services with 19%, and communications 11%. The average interest rates for the securities exchange transactions in the last three years were as follows: 1992, 22.8%; 1993, 19.93%; 1994, 16.96%, and 1995, 21.52%, and then declining in the first quarter of 1996, to 19.12%.
He was speaking at a seminar about the security exchange market held at the Association of Banks.