Glossary of investing in Paraguay

The terms that appear in the catalogue, each explained in a single sentence. If something on the site cannot be understood without looking it up, that is our problem and not yours.

Bond: A bond is a debt security: by buying it you lend money to the issuer, who undertakes to return your capital on a set date and to pay you interest along the way.
Corporate bond: A corporate bond is a debt security issued by a private company to fund its operations. It usually pays a higher rate than a government bond because the risk of non-payment is also higher.
Government bond: A government bond is a debt security issued by the Paraguayan state or public entities. It generally offers a lower rate than a corporate bond in exchange for lower default risk.
BOTE: A BOTE (Treasury Bond) is a debt security issued by Paraguay's Ministry of Economy and Finance to fund the state.
CDA: A CDA (savings deposit certificate) is a fixed-term deposit issued by a bank or finance company: you lock up the money for an agreed period in exchange for a rate known in advance.
Share: A share is a portion of ownership in a company. Unlike a bond, it promises neither to return capital nor to pay a rate: its value depends on how the company performs.
Trust: A trust is a structure in which an administrator manages assets or cash flows kept separate from the estate of whoever contributed them, for the benefit of investors.
Nominal annual rate: The nominal annual rate is the percentage of interest the instrument pays per year, without accounting for reinvesting the interest received. It is the rate the Asunción Stock Exchange publishes and the one shown in our catalogue.
Effective rate: The effective rate is the real return on an investment once compounding of interest is taken into account. It is higher than the nominal rate when interest is received and reinvested before maturity.
Term: The term is the time between the instrument's issue and its maturity. The Asunción Stock Exchange catalogue holds terms ranging from a little over a year to more than ten.
Maturity: Maturity is the date on which the issuer returns capital to the investor and the instrument ceases to exist.
Principal repayment form: The principal repayment form states when you get your invested money back: 'at maturity' means all at once at the end, while 'amortising' means in instalments across the term.
Interest payment form: The interest payment form states how often you receive the return: monthly, quarterly, semi-annually, annually, or all at once at maturity.
Credit rating: A credit rating is an independent agency's opinion on the issuer's ability to meet its obligations. It runs from AAA (the highest) downwards, and is neither a guarantee of return nor a recommendation.
Rating agency: A rating agency is an independent firm authorised to assess and publish the creditworthiness of securities market issuers.
Credit risk: Credit risk is the possibility that the issuer fails to pay interest or return capital. It is borne entirely by the investor, and is why lower-rated instruments offer higher rates.
Liquidity: Liquidity is how easily an investment can be turned into cash before maturity. Secondary-market liquidity in Paraguay is limited, so it is best to invest money you will not need.
Secondary market: The secondary market is where investors buy and sell already-issued instruments among themselves. Its existence does not guarantee a buyer will be available when you want to sell.
Broker: A broker is the entity licensed by the Comisión Nacional de Valores to execute purchases and sales of securities in the Paraguayan market. Investing in any Asunción Stock Exchange instrument requires opening an account with one.
Issuer: The issuer is the company or entity that issues the instrument and takes on the obligation to pay interest and return capital.
Suspended issuer: A suspended issuer is one whose activity has been restricted by the regulator. It is a meaningful warning sign, and the situation should be verified with a broker before investing.
ISIN: The ISIN (International Securities Identification Number) is the unique twelve-character code identifying each financial instrument worldwide. Those issued in Paraguay begin with 'PY'.
BVA: The BVA (Asunción Stock Exchange) is the exchange where securities are traded in Paraguay and the primary source of the data Invertipy publishes.
BVPASA: BVPASA (Bolsa de Valores y Productos de Asunción) is the other exchange operating in the Paraguayan securities market.
CNV: The CNV (Comisión Nacional de Valores) is the body that regulates and supervises the Paraguayan securities market and licenses brokers.
Minimum amount: The minimum amount is the smallest investment a broker will accept for a given instrument. It is set by each broker, not by the issuer, and can vary between them.

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