Here is an excellent article that I read that was written by Santiago Fernández Castro who is president and CEO of CFS Investments.
The right financial conditions would allow the country to become the Singapore of Latin America.
Source: americaeconomia.com
Analysis & Opinion
Please excuse the google translation.
Panama is in fashion these days. The increase in GDP per capita is among the highest in Latin America, has investment grade with a positive outlook, and it has gotten out of the OECD’s gray list and it has a solid banking system. But that’s not all: the canal passing through its territory will be expanded from 2014, and Panama not only has the second largest Free Trade Zone, but also has a huge investment plan in infrastructure. It is estimated that by 2020 Panama will double its population and GDP. These are just some of the good news that has generated this small country of less than 100,000 km2 and 3.5 million people, and explain why a growing number of multinationals and foreign professionals have chosen it as an investment destination and business.
However, for now, the Panamanian stock market is very underdeveloped. For now.
Panama has a tremendous opportunity to become the Singapore of the Americas. But this has to overcome a big question, a big if. If you can complement everything that has successfully differentiated services in the rest of Latin America and in many areas directly compete with Miami. If it can be incorporated into a modern efficient banking system and stock market to build a strong financial system. The aces that are there in Panama to achieve this are a modern legislation (1999) which includes indirect ownership, the territorial tax system for income tax and the U.S. dollar as its functional currency, which coincides with that of the remaining savings Latin Americans.
This differential stock market could come from the public offering of debt securities and equity of small and medium Latin American companies are encouraged to list its shares on the Bolsa de Valores de Panama, assuming a lower cost than on Wall Street, and recorded in Panama’s dollar-denominated bonds already authorized in their respective countries of origin.
The Panamanian market could raise debt and equity issues of small and medium-sized multinationals.
This last point in the supply of debt securities would meet the demand created by the liquidity of the local banking system idle, lack of investment vehicles for institutional clients, corporate and retail Panama, and the fate of dollar savings Latin Americans out of their countries in bank accounts are not reversed. These could be the main buyers of debt securities and equity of companies in their own countries to come to invest in a home called Panama that offers legal security, confidentiality and tax advantages.
Today the Panamanian market is small, shallow and is concentrated in a few local holders, mostly banks, which hinder the development of a securities market. In part this is because there is no greater supply, and emissions from private companies are structured and underwritten by the banks until maturity, but not allowing the democratization of capital. Its atomization benefits only the small and medium investors, but the issuers.
Part of the challenge then is to get an overview of all stock market participants, including the regulator, issuers, brokers and investment advisers to make the Securities Hub of the Americas a reality. This is a great opportunity and a cure for myopia that today does not allow us envision what would the massive participation of local and foreign customers who buy securities in USD or even in their home currencies.
It would mean that foreigners who acquire securities in Panama not only more dynamic financial system, but also banking. This means more business for more than 70 securities firms licensed to operate in Panama.
This means that the most important houses in Mexico City, São Paulo, Bogota, Lima, Santiago, Buenos Aires and even open up branches or correspondents of Panama, thereby generating in Panama on Latin American stock markets in dollars. For now, however,this is only a personal view.
If, If, If? This article is a great big fantasy which ignores the huge pink elephant farting in the middle of the room.
Now do not get me wrong the potential is certainly there, but the impediments to these attainable goals make them a fantasy unless government is taken back, from the crime syndicate which has run this country from government to government to government.
People, the Republic of Panama is run by two governments; one that was elected and which is obliged to abide by the laws and its constitution. A government totally undermined and ignored.
And the defacto government who rules and paints this nations President on the wall and directly overules his Cabinet and his government policy and is not hindered in any way by this nations laws or its constitution, making it more effective to the purposes of individuales who are allowed to yield absolute power over law, constitution and the rights of anybody that they wish to target.
This de facto government is composed of hooligans who occupy the Board of Directors of some of Panamas biggest lawfirms, banks and Fiduciary firms and whose acts have turned the Panama Corporation into a very high risk and unfeasable vehicle for any business venue.
The Public Registry of the Republic of Panama has recently certified (795-A-2011) that acts resulting in securities fraud were inscribed in the registry in a case in which ASSETS TRUST & CORPORATES SERVICES, INC., a fiduciary firm owned by the lawfirm of PATTON MORENO & ASVAT, emitted all the shares of a company owning huge asstes in Panama to secure and retain these values for a trust (-mortis causa-), which was at the moment, not in existance and would not be for almost a year later.
They did this without having any legal ties to the affected company, or their would be dying trustee who they targeted and later conquered with shameful methods and manners that include forgeries in which the future beneficiaries of said trust, were named to this companies Board of Directors along with Assets Trusts Legal Representative Gisela Alvarez de Porras by way of said securities fraud. Not only did they replace its shareholders to these company posts with the future beneficiaries of the then unexistant trust, taking over its daily administration and control, but they pretend to own all of this companys shares by simply printing up certificates and falsifying reunions of its board of Directors and Assembly of shareholfders and inscribing these falsified documents in the Pûblic Registry without the knowledge or concent of its true owners.
Well, we all know that white collar crime plagues every nation of this planet, but in Panama it is backed up by Panamas de facto government and the real government is kept aloof of it all and remains in the sidelines, not acting in any way on behalf of a State of Law.
The legitimate shareholders of the company subjected of this undeniable securities fraud, filed criminal complaints in 2003 which were ordered to be totally ignored during Ana Matilde Gomez´s reign as this Nations State Attorney.
Today we can see Ebrahim Asvat of PATTON, MORENO & ASVAT, who is directly incriminated in the fraud, and Doña Matilde, hand in hand in a brave fight attacking Mister Martinellis government, to secure and reinstate ” A State of Law” in Panama.
Doña Matildes Secretary at the time, Rigoberto Gonzalez today works for PATTON , MORENO & ASVAT and is tirelessly working on two criminal cases, to which he applied his governments posts countless resources during his tenure; the prosecution of the legitimate shareholders of the company which Asvat and Porras pretended to takeover by emitting all of the companies shares without knowning that this unrepeattable act had in fact been realized a decade before by the very supposed trustee to whom they pretended to attribute this act ten years after the fact.
So Panamas government simulates criminal charges against the legitimate shareholder of this company which are founded on the fact that these legitimate shareholders held a reunion of shareholders and changed the bogus Board of Directors that these criminals had ilegally registered. The government is steam ahead in prosecuting these bogus charges founded upon the fact that the true criminals were not included in said Assembly of shareholders, even though neither they nor their bogus stock certificates apper in the companys books.
Gisela Alvarez de Porras also puts up her ten cents for this cause of “A State of Law” through a website, vocesvitales.com .
You will observe that all of this countries civil organizations limit their activities to attacking their elected government headed by Ricardo Martinelli and not in attacking the plague of individuals who run the criminal syndicate which operates their countries government by way of the udermining of their institutions, laws and constitution.
The growth of Panamas stock market under these actual conditions is a hope for a wet dream!
I enjoyed your article and perspective. For many years, I have had a curiosity about the Panamanian stock exchange and it’s potential for growth and capital origination. I have a background in the Securities Industry, both in origination and distribution. It would seem that there would be a great deal of opportunity to easily attract exchange listings and corporate finance clients from other countries in this period of instability internationally. Your reference to becoming the Singapore of the Americas is probably right on target. I am curious as the opportunity that might be available to financial service professionals from the U.S.