A brief introduction about what the financial market of Ecuador offers
Public securities are debt securities issued by various organizations belonging to the Ecuadorian public sector. Below we can see what are the public sector investment options in relation to the effective annual rate. It is important to mention that the effective annual interest rate is the real return on a savings accounts or any interest-paying investment when the effects of compounding over time are taken into account.
Corporate bonds are securities issued by private companies to finance their activities. The accumulated amount negotiated for June 2020 covers an amount of 218 million dollars. As can be seen in the graph, there is hopeful dynamic in the corporate bond market.
Commercial paper is a security that represents debt which grants a right to collect interest and capital in the short term. The amount negotiated is around 402 million dollars in this year. 55 companies have issued commercial paper. In the attached graph are the 10 companies with the highest returns in the commercial paper market.
Accounts Receivable Factoring are generic securities whose structuring does not require a risk rating. The amount negotiated in this security for 2020 is around 173 million dollars. In the attached graph are the 10 companies with the highest returns.
TWO INVESTMENT EXAMPLES
PAPIZZEC is the company in charge of the establishment and administration, here in Ecuador, of the third largest restaurant chain in the United States, Papa Johns. It arrived in 2004, and currently has 16 stores nationwide, being one of the main objects of demand in the market.
Corporación Favorita is the largest non-state company in Ecuador. It has 22 national commercial chains and 12 international commercial chains. It has 15 industrial plants, 9 distribution centers and 332 national commercial stores. Despite the pandemic, Corporación Favorita has given good results since most of its business lines did not stop operating during the sanitary emergency. The company is an important part of a strategic sector that provides financial stability to all its shareholders.