With the implementation of nuam exchange on the horizon and a changing investment environment, the head of Capital Markets at the comprehensive investment platform is predicting a good end to the year.
For Credicorp Capital's capital market business, 2024 has been a year marked by the positive evolution of the fixed-income and foreign exchange businesses. Thus, with less than three months to go until the end of this year, expectations for the end are optimistic, with growing activity in international trade and the search for new investment opportunities.
This is what Andrés Venegas, head of Capital Markets at Credicorp Capital , says, who maintains that the evolution of interest rates has especially benefited fixed-income instruments, while the volatility in exchange rates has generated a significant demand for coverage, particularly among corporate clients - who have been quite active - in international trade activities.
In the case of the equity business, although it has not shown such intense dynamics as in previous years, attractive opportunities have been identified for investors, especially in the retail segment . “We have been very active in activities abroad with foreign investment agents to continue promoting the opportunities that exist in regional markets. Due to liquidity levels, this type of investor has been a bit apathetic to enter illiquid markets, however, in the perspective that we have going forward with nuam exchange - an integrated stock market between Chile, Colombia and Peru - we are going to have a larger, more robust and liquid market. This is a good time to do all this commercial activity and start sowing for when greater opportunities arise,” Venegas told AméricaEconomía during the Investor Conference 2024, held in Lima.
In this regard, Credicorp Capital is preparing for the second quarter of 2025, the date when nuam exchange is expected to be operational. “We have activated specific plans through a project office. This [nuam] requires that we align not only internal teams in terms of technology, legal risks and other types, but also at the country level, because we are a company that has a presence in three countries [Chile, Colombia and Peru]. This implies a great challenge and having set up a project office allows us to be much more organized to move in accordance with and based on the guidelines established by the nuam exchange project,” says the Colombian executive.
Investment prospects after rate cut
The Fed's interest rate cut last September opens up new investment opportunities in emerging markets.
“This [rate reduction] marks a new cycle and a greater incentive is expected for investments in emerging markets seeking better returns in fixed income,” says the head of Capital Markets at Credicorp Capital.
In this regard, the firm has Credicorp Capital USA, a vehicle through which it can carry out commercial activities with foreign institutional clients. "What we do is promote the markets of the Andean region so that when they need to make investments in Colombia, Peru or Chile they have a point of reference," says the executive.
At the same time, Vengas says that there has been a growing dynamic among local institutional clients (from Colombia, Peru and Chile) who are quite active in the United States and other foreign markets, which through their institutional desks in these countries, offer execution through their international platforms so that they can gain exposure to international assets.
"This complements a vision where we work with north-south and south-north flows in dollar-denominated assets. The United States has been a key platform in this exercise and within Credicorp Capital's strategy we continue to bet on the consolidation and growth of this vehicle. In the United States we also have a FX sales and trading desk, a variable income sales and trading desk and we are betting on continuing to strengthen the vehicle in terms of assets, the number of products and making the offer much more robust to offer increasingly varied investment alternatives," concludes Venegas.
