Nicaragua Stock Market, Economy, Business
Nicaragua has a population of 5.6 million individuals and is rich in natural resources such as lead, gold, fish, copper and timber. It is a country that has been so wrapped up in war, corruption and government changes, that it has had little time to take advantage of agricultural products such as sugarcane, lobsters, beef, tobacco, coffee and rice. The country is also home to several successful industries, including textiles, food processing, metals and chemicals. However, Nicaragua needed a stable economy to fully realize the potential of these resources.
Violetta Chamorro became president in 1990 and Nicaragua soon started to see many changes. Establishing a Nicaraguan Stock Market meant that the economy would have to be privatized and local residents were given the opportunity to register their businesses on the Nicaraguan Stock Market. The larger sugar and coffee manufacturers, together with the banks and the Ministry of Finance representatives, worked towards the creation of a stock market in Nicaragua and by 31 January 1994 the Bolsa de Valores de Nicaragua, or the Stock Exchange of Nicaragua, was opened for business.
The Stock Exchange of Nicaragua is the only stock exchange in the country and is overseen by eleven banks. As with any stock exchange, there are registered broker houses that operate from within the stock exchange and brokers are first evaluated for eligibility. Brokers then need to pass a written test at the end of a two-week course before they are allowed to trade within the broker houses.
As opposed to other stock exchanges, the Bolsa de Valores de Nicaragua
is a growing entity within the Nicaraguan Stock Market and therefore only
bonds are traded on the Stock Exchange of Nicaragua. The stock exchange
allows private company shares to be sold, but to date no-one has traded shares
on the exchange. In 1999 the stock exchange saw a decline in activity, but this has been put down to the fact that the bonds are short term and that the Stock Exchange of Nicaragua needs to focus on attracting investors. As a growing business, the Bolsa de Valores de Nicaragua just needs a little time to stretch its legs in order for it to become an important contributor to the economy of the country.