13 hours ago
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Venezuela’s main stock index (the IBVC) surged by 124% in just five days last week, the kind of rally that almost never happens in any economy, let alone one with barely any functioning market.
The entire thing of course started right after Trump’s forces illegally captured Venezuela’s leader Nicolas Maduro over the weekend and dragged him over straight to Washington to “face the law.”
Brokers say international clients are ringing nonstop, asking for ways to get into Venezuela before prices go even higher. But even if you’ve got cash to spend, good luck using it, because the market’s tiny, there are less than 40 listed companies, and the total market cap sits at just $22.5 billion using the official exchange rate.
That’s pocket change by Wall Street bro standards. Then of course there’s the money issue, because for he entirety of its existence, Venezuela is still cut off from most of the global financial system.
Just converting dollars into bolivars is a pain. And if you’re a foreign investor, you’ve got to go through the country’s tax agency, which is infamous for being slow and buried in red tape.
Todd Sohn, an ETF strategist in New York, said it bluntly: “If you wanted to try and get access to Venezuelan assets, I’m sure you could find a way, but it’s too small.” Still, Todd says there’s potential to package it for retail investors. And now someone’s trying. This week, a new ETF filing hit the U.S. Securities and Exchange Commission. It’s built around companies tied to Venezuela; not just stocks in Caracas, but also firms that do business there. Basically, anything that touches the country.
Bonds and stocks go wild, but trading stays tiny
None of this is normal for Venezuela. Back in the day, the market was lively. But decades of currency controls, hyperinflation, and socialist policy under Hugo Chavez and Maduro crushed it. Even with signs of a turnaround, sanctions and strict laws kept banks and insurers out, choking off liquidity. That hasn’t changed.
So even with all the noise this week, total trading on Venezuelan stocks and bonds is still tiny. According to one local source, the number barely cleared $200,000 using the parallel exchange rate. And that’s with the market going full rocket mode.
Maduro’s arrest lit the fuse. He’s now facing drug charges in the U.S., and with Donald Trump back in the White House, everything’s changing fast. His removal pushed Venezuela’s dollar bonds to their highest prices since 2018. That’s after secondary market sanctions were relaxed in 2023. People are already betting on a full debt restructuring.
The Caracas stock index didn’t just rise. It flew. The 124% jump in just a few days even triggered automatic halts in trading for 13 different stocks. Under exchange rules, any price swing over 20% in a day stops the action.
Meanwhile, the bolivar is crashing again. It’s down over 20% this week in the parallel market, and the gap between the official and street rates is wider than ever.
Brokers are now scrambling for workarounds. Some are offering securities tied to real estate. Others are building dollar-denominated fixed income deals. A few are pushing stocks of energy firms that still have exposure to Venezuela, but there aren’t many left.
Diego Celedon at JPMorgan summed it up: “In 2013, we identified 12 companies with direct operations in Venezuela; half of these have since exited the country or been delisted.” There’s not much left on the shelf.
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