What is fueling Colombia’s equity offerings, which exceeded $7bn in 2011?

CORDOBA: Indeed we had a great year last year in IPOs and secondary offerings, with $7bn being issued in the Colombian market. But this is the result of many years of work towards that goal. We've been working over the last five years in engaging Colombian companies, both listed companies and non-listed companies, in coming to market and seeing the benefits of being in the market and increasing the float. The other thing that has happened, and it’s been very positive, is that companies are becoming much more multinational. They’re thinking about growing overseas by making investments overseas.

What are your expectations for 2012?

CORDOBA: We had nine issues last year, and we’re expecting a similar number, between seven and ten, for this year. However, the overall amount that was issued last year, $7bn, we believe that was an exception. We will probably have a lower amount this year; but still much more than we've seen in the past no doubt.

How have recent records affected business for BVC?

CORDOBA: Well the last few years have been great for the exchange; not only in terms of new issuance, but also in overall trading volumes in all of the markets that we provide services in: the equities markets, fixed income markets, FX markets and the derivatives markets. They've all presented growth rates that are tremendous. The last seven years we've had an average annual growth rate of 26%. In terms of equity, it’s even higher than that. We've had a tremendous year with the development in the domestic markets, equity in our equity market multiplying twenty-five fold, and new issuance, all of which are important to fuel further growth in the market. The financials and business of the exchange are doing very well.

What is the breakdown between foreign and domestic investment on the BVC? How important is foreign investment to economic growth?

CORDOBA: All the growth that we’ve seen in the market in Colombia has unfortunately been led by domestic investors. Foreign investors, foreign portfolio investors in Colombia, are still very small. They represent just 8% of transactions in our exchange. Although they have doubled over the last two years from 4% to 8%, 8% is still very small, and we’re aiming for that number to become 15% by 2015. So we’re working very hard in aiming all of our strategies to attract more foreign investments into the Colombian marketplace.

What is your future economic outlook for Colombia?

CORDOBA: Colombia has a tremendous track record. It’s one of the best performing exchanges over the last ten years around the world. Not just in Latin America, but around the world in terms of equity valuations. We’ve had also new listings, new companies. We now have more than twenty two, twenty three companies that are actively traded. Which ten years ago, seven years ago we had very few. So the market is growing, valuations have been there. If you look at Colombia ten years down the line, moving forward, the prospects are tremendous. In addition to FDI growing tremendously, the mining, oil, and gas sectors are experiencing growth. These are becoming very important as new listings in our exchange. We’re also experiencing growth with construction, infrastructure, and housing. All of these segments are targeted to domestic growth while trying to further the middle class population over the next few years. This makes the prospects of Colombian investment a very profitable one moving forward.

How successful has Colombian, Peruvian, and Chilean exchange integration been thus far?

CORDOBA: The integrated markets of Latin America, MILA, are the integration of the equity markets of Colombia, Peru and Chile. In our point of view, MILA has been a tremendous success. First of all, because it has proved to the regulators and the market participants that it could be done. Now we have markets that have been integrated since May of last year. The Colombian investor can buy equity in Chile or buy equity in Peru by talking to the local broker in Colombia and giving an order to the Colombian exchange. We have the regulation in place, it’s fully operational, and it benefits issuers, who by listing in one of the countries, can automatically be traded in another. Also, the investors who are located in one of the countries can access the securities in the other countries. All of this is already happening and it’s been quite successful. Most importantly, I believe that the integration is moving forward very rapidly and we’re seeing that in Colombia. For example, we have four brokers from Chile that have already set up shop in Colombia and the largest Peruvian bank just bought the second largest broker in Colombia. The integration goes beyond the exchanges. It is going to what really matters, the financial intermediaries. The brokers and the intermediaries are seeing that there is a business case in Colombia for integrated trading and product offering for all clients in the three countries.

How likely is the addition of Mexico into MILA?

CORDOBA: MILA today, with Colombia, Peru and Chile has a market capitalization of $650bn and more than 500 listed companies. With the addition of Mexico, we will exceed $1tn in market capitalization and 600 and some companies. This would make it one of the most attractive emerging markets around the world in terms of market capitalization, and in volumes traded and number of companies listed. So, for sure, the incorporation of Mexico into MILA would be a great success and you would have for international investors a clear destination for investment in the region, ex-Brazil. So if you want to be in Latin America, you’re already in Brazil but you want to explore alternatives, we would have the alternative right there with MILA. With the three countries today, we have it. But of course with Mexico joining in we would be a second place to go, no doubt.

What role do foreign companies play on the exchange?

CORDOBA: We opened the avenue for the listing of foreign companies into the exchange in 2009. The first case was Pacific Rubiales with tremendous success. We now have four companies that have been listed in Toronto for a while and that have listed in Colombia as well. But there are more than 60 companies, foreign companies that have been doing business both in the oil and gas sector or the mining sector, that are either small caps or mid caps, that eventually could come to market, joining the success story that is Colombia today. Over the next few years, in moving forward, we do hope we’ll have more companies listed and, hopefully, more success stories.

Is the share price of BVC fair?

CORDOBA: With the development of the market, our financials have been very positive and we’re very satisfied with the results. On average, we've kept EBITA margins on top of 40% over the last few years and last year our profits were up 20%. Our dividend payout is going to grow 60%, with a 100% payout to our investors. I think that investors with BVC are very satisfied with it as a company. We’re a listed company and close to 20% of our equity are foreign investors.