Thursday, December 1, 2022

Stock market education, essential to attract more participants to the Dominican stock market

One regularly hears talk about the stock market and the benefits it brings to the economic development of a country and to individual investors. However, for many people in the Dominican Republic, the concept is not only new, but also “complex”, where they believe that only people linked to the area of ​​economics and business administration participate.

This mistaken perception, for the most part, is due to the fact that the Dominican stock market needs to promote financial culture. For Diego Herrera, Lead specialist of the Connectivity, Market and Finance Division of the Inter-American Development Bank (IDB), stock market education continues to be one of the main challenges of the sector, despite its sustainable development.

During his participation in the panel “Diagnosis and Roadmap of Capital Markets in the Dominican Republic”, organized by IDB Invest, Herrera highlighted the importance of bringing the sector closer to people to develop a greater stock market culture in the country, since it is a mechanism to finance projects with potential.

He indicated that the issue of financial education can be approached in two ways: effective communication through digital platforms such as social networks, particularly Instagram and TikTok to attract young participants; and sending assertive messages about the level of risk they assume and depending on what factors the expected return will be.

Regarding the primary market, also known as the financial asset issuance market, he said that “there are opportunities to make the issuance calendar a little more transparent (…) and adapt it to the current market.”

Regarding the secondary market, for negotiation or transaction of operations, he maintained that it should be more dynamic and transparent. “Nothing replaces the transactional market, it is the most comfortable thing there is, but it does not generate prices, it is not transparent, it does not generate dynamism, there are no incentives, that is, they do not line up for people to negotiate,” Herrera said, emphasizing that the market must become transactional.

The activity is part of the meeting “Future of Capital Markets: Innovation and Sustainability” of the IDB Group, where a series of conferences and panels were held to learn about the context of the capital market in the Dominican Republic and the main opportunities for innovation. .

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