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Comparison of Panama IPO Market to Us Market
negotiable securities in our country. However, these efforts are focused on a specific and limited sector; thus preventing a sector of equal or higher purchase power from participating in Panama’s Securities Market.
In addition to this limitation, the lack of knowledge about the matter in a general level, by bank depositors –who are more focused in the banking center as source of income over their savings-, reveal the lack of investing opportunities, thus limiting the development of the Securities Market in Panama and, therefore, the development of the economy in the country.
Panama is currently a country where a large part of the population lives in a situation of poverty; other part of the population generates income only large enough for survival. Because of this, talking about the existence of savings plans that could be turned into investments turns out to be somewhat cynical and cruel, since the savings habits of the average Panamanian is almost nonexistent. As a result, the universe of local investors is quite reduced.
To make things worse, those investors that could invest find themselves skeptical and distrustful, due to recent financial scandals that have weakened the fundamental element for our system to work efficiently: trust.
However, despite the fact that we are advancing and we feel we are on the right track, since we have a better legislation than the one we had years back, there’s no doubt that we still have so much to do. Facts, rather than words, are required. Reaching a fine level demands time and is a labor that involves many members of society. It is not a labor to be done isolated from the regulatory entity of the securities market. The private sector, as well as the Government and all of the community must participate.
We must point out that the world economy has received severe blows in recent years, with the Securities Market being one of the most affected, a situation that generates mistrust among investors. The bankruptcies of listed companies in the Exchange, the social and political instability in our country are some of the determining factors in the short- and medium-term development of the securities-trading activity.
External auditors and independent public accountants also play an important role for the system to work efficiently. They must be important allies of the investing public and the CNV. Accountant perform a very important role, since they are, by law, to attest about the veracity of information related to transactions carried out by public companies, as well as the disclosure of their financial situation, with the purpose of facilitating decision-making by the shareholders. In light of new regulations that protect investors, such as the Sarbanes-Oxley Act of 2002 of the US, the CNV has taken actions on this subject and issued Accord 7-2002, whereby modifications are introduced to certain aspects that regulate registered companies and their auditors and accountants.
Considering the current situation of the country’s economy and the low levels of investments by depositors, it is [next page]