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| Additional information |
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| Santiago Stock Exchange |
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History:
In Chile, the first attempts to create a Stock Market were made in 1840 with little success. In 1884 there were 160 Incorporated Companies, which made it necessary to establish a specialized stock market towards which the transactions of securities shifted.
On November 27 of 1893 the Santiago Stock Exchange was founded, an important step to inject vitality and dynamism to the national economy. In those years there were already 329 Incorporated Companies, the majority of them in the mining business.
During the last century, many important events occurred that directly affected the operations of the Santiago Stock Exchange. The first one that deserves to be mentioned is the economic crisis in the beginning of the '30s, which struck Chile, and most countries of the world. Until 1929, the stock market lived a period of great prosperity like never before. This economic bonanza was the consequence of the favorable economy that the world and Chile exhibited and a reflection of the prosperity of the New York Stock Exchange and the main capitals of the world. But in September of 1929 the positive trend ended. In 1930 the collapse of all securities was general, being the mining securities the most affected, particularly those of the saltpeter industry.
The period of 1930-1960 was not very favorable for the stock exchange. It began with a deep and catastrophic depression, from which it emerged in 1932, to begin a phase of great activity. From the arrival to power of the Frente Popular in 1938, deterioration began which was directly related to the expectations resulting from World War II. Furthermore, the government's growing intervention in the economy, either directly or indirectly constrained free enterprise.
The stock market was weak, when not openly depressed, and with persistent trends to decrease. This period continued until 1973, when it became more serious in the era of the Unidad Popular, a period in which, the country was in the limit of hyperinflation with an annual rate close to 400%.
At the same time, the institution took over the public defense of the Stock Exchange and the Incorporated Companies, in an attitude that transformed it in one of the most important outspoken voices supporting private enterprise in those years.
Since 1973, a general consensus was reached in terms that a deep economic reform should be implemented, mainly oriented to the liberalization of the economy, the decentralization, the opening to foreign markets and the respect for private property.
Inside the package of economic reforms that were introduced and that benefited the stock market, was the pension fund reform. This system replaced the old regime based on the distribution of a common fund for another of individual capitalization, in which pension savings were managed by private institutions. The Administradoras de Fondos de Pensiones. (AFP), (Pension Funds Management Institutions).
Under the model of a free-market economy adopted in 1973 and within the main frame of economic growth (which has predominated in the country since the '80s), the Chilean Stock Market has undergone an extraordinary development. This has been characterized by a substantial growth of stock market operations, the amount of securities issued, the diversification of the instruments transacted and the opening of new markets.
On the other hand, during this period, important institutional investors such as the Pension Funds Management Institutions, Insurance Companies, Foreign Investment Funds and Mutual Funds were incorporated to the Santiago Stock Exchange.
Another process worth mentioning during the '90s was the opening of Chilean Companies to the international market through the issuance of ADRs and the internationalization of local companies through their participation in the ownership of important companies mainly located in Latin America.
Regardless of these positive results, in this long-term evolution some back draws occurred due to the economic crisis in 1981-1982, the adjustment applied in the beginning of 1990 as well as the situation derived from the Asian crisis.
In another area, since 1981 the Stock Exchange adopted the use of modern technologies. Beginning that year it computerized its main processes. It currently has its own network of over 100 terminals connected to its Tandem equipment which is highly-tolerant to failures and has access to a huge variety of services through Internet. Now its users are worldwide.
With a centennial history in the Chilean stock market, the main challenges for the Stock Exchange's future are mainly directed towards the deepening and further development of the stock market, focusing on the integration of the Santiago Stock Exchange with international financial markets. Likewise, its challenge is to incorporate new technologies facing it and to motivate the participation of new investors in the market. |
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Formerly known as:
Bolsa de Comercio de Santiago (CHILE) |
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