El Salvador: Stock Market Trading Down

The reduction from 20% to 3% in the tax on stock profits was not enough to prevent trading on the secondary market in the first quarter of the year falling by 94%.

Wednesday, April 27, 2016

In the first quarter transactions in the four markets operated by the Stock Exchange of El Salvador recorded a drop of 3% compared to the same period in 2015. The decline was seen despite that fact that in November last year there was a 3% reduction of the tax on return on investments in securities.

In respect to the 94% drop in transactions in the secondary market, Rolando Duarte, president of the BVES, told Elmundo.sv "... there are at least three possible causes for this behavior. One is the null trading in Treasury Bills (Treasury bills), compared to $16 million which were traded in the first quarter of 2015. "

"... However, this phenomenon is not being attributed to the difficult fiscal situation of the state. Duarte said investors probably find it more profitable not to sell their titles, but neither did he rule out the influence of the tax on financial operations. "

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