Congress likely to permit int. pension investments 2004

El Salvadorian pension fund managers (AFPs) are likely to receive authorization from Congress in the second half of next year to invest part of their funds abroad, deputy private pension regulator Fransisco Sorto told BNamericas. Presidential elections are scheduled for March next year and after the change of command in May, Sorto believes there is a good chance Congress will approve a new law authorizing international pension investments. Sorto said current investment options in El Salvador have become too limited for the AFPs, which today hold 99.6% of their funds in bonds and bank deposits. "The stock market here is not even incipient," he noted. The regulatory agency is contemplating an initial international investment ceiling between 5-10%, which could be gradually increased to 20% on demand, Sorto said, adding the agency will first permit the local AFPs to invest in the US capital market and then after one or two years, extend the AFPs' reach to include certain European markets. El Salvador's private pension system consists of only two players BBVA Crecer AFP and AFP Confia, which belong to Spanish financial group BBVA (NYSE: BBV) and US-based Citigroup (NYSE: C), respectively. A third AFP - Profuturo - was intervened in 2000 on solvency woes and is currently being liquidated.