Stock Market Liquidity in Chile

Information about Western Hemisphere Hemisferio Occidental

Journal Issue

Volume/Issue:: 2016/223
Series:: IMF Working Papers
Author(s):: Luis Brandao-Marques
Publisher:: INTERNATIONAL MONETARY FUND
Published Date:: November 2016
DOI:: http://dx.doi.org/10.5089/9781475554656.001
ISBN:: 9781475554656
ISSN:: 1018-5941
Page:: 29

Chile has a large but relatively illiquid stock market. Global factors such as global risk appetite and monetary policy in advanced economies are key cyclical determinants of liquidity in Chilean equities. Evidence from a cross-section of emerging markets suggests strong protection of minority shareholders can help improve stock market liquitidity. Currently, illiquid in Chilean may have to pay 31/2 percent more as cost of equity. Corporate governance should be improved, namely through the adoption of a stewardship code.

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Stock Market Liquidity in Chile