Venezuela IBC Index, the benchmark index of the Caracas Stock Exchange, surged 50 per cent in one-day, on January 06, after a renewed hope among investors for the revival of the battered Venezuelan economy
due to sanctions after the capture of its President Maduro.
On January 06, the index gained almost 1300 points to end at 3,896.77. Venezuela’s stock market has risen 74% since President Maduro was captured.
What Triggered the US-Venezuela Crisis?
The United States, on January 03 late night launched an unprecedented military operation in Venezuela that led to the dramatic capture of President Nicolas Maduro and his wife, Cilia Flores. Maduro’s capture has plunged Venezuela into political uncertainty, with Washington asserting it will ‘run’ the country till a ‘safe’ transition.
Why Is Venezuelan Stock Market Rallying?
Investors are expecting that Venezuela might get sanctions relief, with the global investment paving the way into the battered South American economy. The return of political stability might be beneficial for the country.
The ownership of the Bolsa de Valores de Caracas (BVC Venezuela Stock Exchange) stocks is majorly held by local banks, financial institutions, and wealthy domestic investors.
Bolsa de Valores de Caracas (BVC), founded in 1947, in reality, trading covers about 15 companies. This is the smallest stock exchange in South America. Trading volumes did not exceed $1 million per day last year.
Venezuelan sovereign and state-run oil company PDVSA bonds have rallied on hopes of regime change and debt restructuring after Maduro’s capture.
