La Paz Stock Exchange (BBV)

What Is the La Paz Stock Exchange (BBV)?

The term La Paz Stock Exchange (BBV) refers to a stock exchange located in La Paz, Bolivia. The exchange, which is also known as Bolsa Boliviana de Valores and the Bolivian Stock Exchange, is the only one in the South American country. Trading began on the exchange in 1989, although the idea to establish it was conceived in 1976. Investors have access to equities, bonds, local commodities, and indexes through the exchange.

Understanding La Paz Stock Exchange (BBV)

Trading began on the La Paz Stock Exchange on Oct. 20, 1989. But the idea was conceived to establish the exchange several years before. As mentioned above, that happened as early as 1976. Three years later, a nonprofit organization was set up with 71 partners. Known locally as Bolsa Boliviana de Valores, the exchange is the only one in the country.

Its mission is to allow the ease of financing and investment and to generate value for market participants. It boasts itself as an accessible and efficient option for market activity. Investors can trade equities, bonds, commodities, and indexes. There are more than 100 companies listed on the exchange. Sectors represented on the BBV traded include (but aren't limited to):

• Agro-industry
• Banks, commerce, financial services, insurance
• Electrical
• Industrial
• Oil
• Transport

Trading takes place Monday to Friday. The exchange made special provisions to its daily schedule because of the global 2020 crisis. The trading schedule varies based on the instrument. The market opens at 7:45 a.m. local time for primary markets for fixed income and variable income instruments. The stock auction runs between 11:52 a.m. and 12:22 p.m.

The exchange moved to an electronic system on Feb. 3, 2020, which is called Bolsa Electrónica SMART BBV or SMART BBV Electronic Exchange. Traders can also execute transactions in the arena, a physical trading floor where negotiation occurs in person. This takes place during a special trading session. Once the session is over, the process of clearing and settlement takes place for these transactions.

Special Considerations

Trading is concentrated on gold and commodity transactions. The activity in the 1990s and 2000s increased with the enlisting of various banking, industrial and services companies along with additional derivative instruments, leading to an increase in volume from years past in which equity investments made up the majority.

One thing to keep in mind is that investing in Bolivia can be somewhat problematic. The country ranks in the 172nd spot on the 2021 Index of Economic Freedom. That's because of how economic development is impeded due to structural issues. Although starting a business in the country isn't difficult, the freedom to conduct business remains fairly low. Foreign investment takes a backseat to domestic investment and the country's financial services industry is not immune to interference by the state.