Investors interested in CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) may not have to look too far.
Colombia, the fourth largest economy in South America, could see its NYSE listings double in the next year. The NYSE currently has two Colombian listings, totaling a market cap of $97.4 billion — only 7 percent of the NYSE’s Latin American total — and well behind Brazil’s 65 percent and Mexico’s 18 percent stakes.
But with Colombia’s GDP growth of 4.4 percent in 2010, exchanges are betting investor interest will grow.
“Colombia is the third largest partner to the US behind Brazil and Mexico,” says Scott Cutler, SVP of NYSE Euronext's listings. "Great natural resources, strong financial sector.”
Grupo de Energia de Bogota, for instance, the leading gas and electricity provider in Colombia's capital city, is considering going public via the New York market within the year. Shares of the company are currently registered in Colombia’s public market, Bolsa de Valores de Colombia.
Grupo de Energia recently launched several projects totaling some $1.6 billion dollars, including an expansion of its natural gas transportation and distribution system in Colombia, construction of a similar system in Peru, and the construction of electricity transmission lines in Guatemala. The firm is financing its “ambitious” business strategy with both cash and debt. In order to enhance liquidity; the firm plans to IPO in an international market within the year.
And Colombia’s third-largest bank, Banco Davivienda, is also planning an IPO on the NYSE in early 2012.
Listing in a U.S. market isn’t just sought after to tap additional liquidity, but to compete more effectively on a global stage, pointed out Bob McCooey, head of listings at NASDAQ.
“Being listed in the U.S. is certainly a different level of acceptance and global seal of approval,” he says. “Our markets are known for the highest standard of capital markets globally. Where do you wanna be?”
Juan Gonzalez, a spokesman for Grupo de Energia de Bogota, says the company is considering two international markets at the moment, one of which is New York.
“New York is the major league,” he says. “New York is the capital of the capital markets, but we haven’t analyzed deep enough the market that is most suitable for us.”
Meanwhile, Davivienda, Colombia's third largest commercial bank also plans to boost liquidity by going public on the NYSE.
“Wall Street is the most important market in the world,” says Efrain Forero, Davivienda’s CEO. “If we are willing to be in Wall Street, we know we can be anywhere in the world.”
The bank went public in its own country last year, selling 26 million shares. And in September, the U.S. Federal Reserve granted the bank permission to open a branch in Miami through its Bancafe International subsidiary.
Bancolombia made history when it became the first Colombian company to enter the U.S. market in 1995.
“What was once a niche bank, a local bank, became, in those 15 years, a financial institution of regional scale,” says Carlos Raul Yepes, president of Bancolombia. Since it went public on the NYSE, Bancolombia is 17 times larger, making it the seventh largest financial institution in Latin America, he said.
In 2008, Ecopetrol, Colombia's state oil company became the second Colombian firm to list on the NYSE.
Since then, the NYSE has actively courted Colombian businesses. In February, the exchange celebrated its first “Colombia Day” in which 18 Colombian firms took part in an opening bell ceremony and were advised on how to list in U.S. securities markets. Executives from Colombian infrastructure, chocolate, retail and energy companies attended the event, including Pacific Infrastructure, Compania Nacional de Chocolates, Grupo Exito and Grupo de Energia de Bogota.
Juan Carlos Santos, a corporate manager of Madero Colombia, pointed out that although his mining and exploration company is currently not considering an IPO on the NYSE, other Colombian executives who attended the event are checking out the rules, processes and benefits of listing.
“Colombia is going to have a huge say in the next one to two decades in the worldwide exchange markets,” he says. “Everyone wants Colombia. We’re in the groove right now.”