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Stock Market Liquidity in Chile

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Stock Market Liquidity in Chile
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Journal Issue
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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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