Venezuela's stock market soared after Maduro's ouster. Is it possible to make money on it?

Venezuela's IBC stock market index has risen more than 120% since January 5, the first trading day after the capture of President Nicolas Maduro by U.S. special forces. The local exchange is small, its market capitalization is about $22.5 billion at the official dollar-to-bolivar exchange rate, and less than 40 issuers are traded on it. Venezuelan stocks are affected by regulatory hurdles and currency risks that inhibit both domestic and foreign investment, Bloomberg notes. However, the agency announced the emergence of a relatively easy way to enter this market.

Venezuela's IBC index rose about 124% this week in dollar terms at the official exchange rate, according to data compiled by Bloomberg. Monday's surge caused an automatic suspension of trading in about 13 stocks - the exchange does this if the daily movement exceeds 20%, a market participant explained.

Part of this rally is related to the devaluation of the bolivar amid political turmoil. Over the week, the currency weakened by more than 20% in the "parallel" market, and the gap between the official and unofficial exchange rates reached record levels, the agency notes. At the same time, trading volumes for stocks and local bonds in 2026 at the unofficial rate totaled only a little more than $200,000, according to a Bloomberg source. Nevertheless, the agency calls the market growth colossal and points to high investor interest.

Venezuela is isolated from the global financial system, and even a simple conversion of dollars into bolivars is far from a straightforward transaction, Bloomberg notes. In addition, international investors must register with the local tax office, a process that is often complicated and full of red tape, the agency says.

"If you want to try to get exposure to Venezuelan assets, I'm sure a way can be found, but the market is too small," Todd Sohn, senior ETF and technical analysis strategist at Strategas New York, told the agency. However, he emphasizes that there is a way to invest in the country that could attract retail investors to Venezuela - an ETF fund on Venezuelan assets.

A registration form for the Teucrium Venezuela Exposure ETF, a fund tracking an index composed of companies based in Venezuela, was filed with the U.S. Securities and Exchange Commission (SEC) on Monday, Bloomberg reports. The fund will not be limited exclusively to stocks listed in Caracas, but will also include issuers with significant exposure to the Latin American country.

Teucrium has previously been known for funds focused on a single commodity agricultural niche (wheat, soybeans, corn, sugar), CNBC writes. In the prospectus for the new ETF, it warns that friction between the U.S. and Venezuela remains a significant risk factor for any investment in the country. Venezuela has already defaulted on foreign bond obligations in 2017, CNBC recalls. "The U.S. could also impose broader sanctions on Venezuela," the document says. - These sanctions, or even the threat of them, could lead to a drop in the value and liquidity of Venezuelan securities, a weakening of the bolivar or other unfavorable consequences for the Venezuelan economy."

Hyperinflation, sanctions and legal barriers have hampered the development of the local market. Under the country's laws, banks and insurance companies are prohibited from participating in trading, which limits liquidity, Bloomberg notes. Venezuelan assets have been rising in value over the past few months amid increased pressure from the Trump administration on Maduro and have gone into explosive growth since his detention.

Maduro's arrest has led to a rally in Venezuela's dollar-denominated bonds - they have risen in price the most since U.S. sanctions on secondary trading were lifted in 2023, the agency writes. The securities are now trading close to their highest levels in more than eight years. Investors hope that political changes will lead to debt restructuring, Bloomberg writes.

Brokers are also looking for alternative ways to give clients exposure, including real estate-backed securities and various fixed-income instruments, even dollar-denominated ones, Bloomberg's interlocutors said. Another option is to invest in companies that stand to benefit from the change of power in Venezuela, such as energy players. However, there are few such issuers, the agency notes.

"Exposure to Venezuelan equities remains limited," JPMorgan equity strategists led by Diego Celedon wrote Monday. - "In 2013, we identified 12 companies with direct operations in Venezuela; half of them have since left the country or been delisted.

This article was AI-translated and verified by a human editor