Venezuela’s National Assembly last week passed the Ley de la Bolsa Pública de Valores Bicentenaria, which will allow for the creation of a new stock exchange geared toward both public and private-sector entities wishing to undertake stock exchange operations. The move is seen as the continuation of a trend in Venezuela toward greater state control over traditionally private-sector functions.
House Finance Committee President Ricardo Sanguino called the new law an important component of the transition to twenty-first-century socialism and not a capitalist enterprise. He says the exchange is not meant to generate a speculative market, but rather to democratize access to liquidity and investment. Entities that will be allowed to raise capital on the market include public companies, joint ventures, collective and social production companies, savings banks, private companies, and small and medium-sized enterprises.
Critics of the new law say it raises more questions than answers. The major issue, according to analyst María Inés Fernández, is which titles are going to be traded and who is going to trade them. It is not clear that there is market demand for a public stock exchange—especially considering that most traders prefer to trade in dollars rather than the volatile bolívar.
State companies are currently traded on the private Caracas Stock Exchange, which will continue to operate but will no longer have access to public titles. The new public stock exchange legislation now awaits final approval by President Hugo Chávez.