In Venezuela's state-owned telecommunications company, shares in the state-owned company soared this week in Caracas as the government announced plans to offer stakes in public companies, boosting expectations for a revival in the local market.
Cia. According to Caracas Stock Exchange data, Anonima Nacional Telefonos de Venezuela SA, or CANTV, surged 41% in two days, after President Nicolas Maduro said that his government was going to list 5% to 10% of the shares of public companies for national and international investment.
Maduro made comments in a televised evening address Wednesday, mentioning CANTV, a state-owned petrochemical company, and oil and gas joint ventures as examples of companies that could soon start to raise capital. The offer would start as soon as Monday, without further details, Maduro said.
These shares are rallying because of the expectation that the government is going to privatize state-owned companies and that it will do so in a more transparent, institutional way through the stock exchange, said Jose Miguel Farias, an independent local investment adviser and broker. For many investors with an appetite for risk, it is worth accumulating positions in these state companies hoping that in the long run it leads to discovering their real value. A historic shift in Venezuela's socialist policy could be made by the announcement, where years of currency and price controls, expropriations and corruption led the country to one of the longest bouts of hyperinflation in history and a seven-year recession. As the crises deepened, Maduro has to relax restrictions and allow an unofficial dollarization, which has helped breathe new life into a dormant market.
On Friday, Caracas Stock Exchange President Gustavo Pulido said at a meeting with the foreign press that the bourse hadn't been informed of any new authorization for public listings. Even if they received notice by Monday, it would take them at least 48 hours to prepare an offering, Pulido said.
The market was not informed of the increase in the stock price, according to CANTV. The stock movement in the price of CANTV's shares is a product of the president's announcement, CANTV's corporate affairs manager, Helen Hernandez, said in a letter to the exchange published Friday.
While economic sanctions are imposed by the US, it is hard to attract foreign investors into the plan as it continues to block dealings with government-controlled firms. Local investors embraced the possibility of the development of the capital market.
Juan Domingo Cordero Osorio, the president of Rendivalores Casa de Bolsa, said there were positive expectations for CANTV's potential investments through the exchange.
He said that a company listed in the stock exchange is regulated and supervised. Investors see this as positive, as it gives them greater security in their investments. When a Wall Street Investment Giant moved to Nashville, nothing happened.
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