1. The Panama Securities Market Presentation to the X General Assembly ACSDA Panamá, February 22 Roberto Brenes P. Executive VP Panama Stock Exchange.

2. Agenda: –The Market and the PSE. –The PSE and the region. –Growth Strategy.

3. The domestic securities market Most of the local market is originated and executed trough the Exchange. The market development strategy, local and regional, is mostly concibed and propelled by the Exchange.

4. The PSE in bulllets Demutualized exchange. Publicly traded corporation. Self-regulated organization (SRO). In business for 17 years. Full Electronic Trading. Integrated C &S. A “business” exchange.

5. A success Story

6. Growing volume

7. Share trading: More Market Cap and better returns.

8. Still… a primary issues market.

9. Solid numbers…

10. The regional market

11. The regional market: Facts and opportunities. Same as Panama, all markets in CA are mostly exchange-driven and small. But: Countries are integrating within and outside region. Economic integration requires financial integration. –Domestic companies requiere long term capital to deal with integration. –Local markets do not have critical mass by themselves. –Domestic investors percibe local risks better but unseasy with local liquidity.

12. Small local markets (2007 traded volumen on each exchange US $) Source: Exchanges

13. The growth strategies The rationale. Small domestic markets. Positive integration efforts. Panama has competitive advantages.

14. Concentration Racionalización Demanda tradicional. Liquidez Penetration Regional integration Regional products North/ South FIAB Expansion Pension funds Privatizations Infrastructure Diversification High School Exchange Financial Futures The Strategies Matrix Markets Present New Products Present New

15. Regional Alliances: The FIAB Model –Co-listing of securities. –Dependent of correspondent broker dealers. –Then requiring: Harmonization of requirements of market and issuers information. Develop strategies to boost and promote jurisdictions that comply.

16. The PCE Alliance: The Norex template : –Based on Cross membership. –Members share Same platform Same architecture. –Liquidity remains local. –Second stage implies consolidation of regional C & S. Exchanges C & S Non owners Owners

17. Other regional alliances. Neighboring posibilites – Andean Markets Inter Institucional Markets. – Regional public debt. –Regional Pension funds. Supra-regional players ( remote operators).

18. . Regional Strategy Requierements. Reduce market barriers. –Improve regulatory quality. –Promote investor education. –Promote critical mass projects.. “.“Cooperations” instead of Competition. –Focus on market expansion (KODAK) –Honor alliances and agreements. –Facilitate regional action.. Emphasize financial and tech requierements. –Mitigate counterparty risk. –Promote liquidity providers or market makers. –Open architecture and open systems.

19. Our competitive position

20. Global changes / local opportunities Changes in the “business”. –Globalization kills distances –Annuities vs. fee business. –Emphasis on private banking. Changes in the regional markets. –Politcal factors –Regulatory changes Panama Strenghts. –Economci and fiscal structure. –Business and regulatory environment.

21. The opportunities Two complementary forces. –The eroding political situation in LA. Promotes capital flight –US regulatary environment of terror Repels capital flight into US Promotes repatriation of capital away from US. An enabling condition. –Technology allows to be anywhere.

22. Our Business Environment The Traditional: - Business-friendly framework and legal advisory - Tax Regime - Commercial Banking The Innovative: –New business units –Brokerage houses and Investment Advisors –Stock exchanges with SEC authorization –Banks with private banking and investment banking units The Revamped –Insurance and Reinsurance Framework

23. Our advantages No taxes; no fiat money. New hot spot for latinos to live. Important business and financial center. Private banking hub. “Designated Offshore Exchange”.

24. ¿Questions?