The Lima Stock Exchange (LSE) is set to achieve its best year since 2016. With a month and a half to go until the end of the year, the average increase in share prices, reflected in its General Index, reached 44.5% (measured in dollars), a few points away from reaching 50%.
There are several factors that explain the good performance of the local stock market. Jorge Ramos, former president of the Association of Stock Brokers, explained to Peru21 that the first cause would be associated with the context of lower interest rates in the United States, which led investors to bet on emerging market assets.
For this reason, both the Peruvian and regional stock markets were favored. “The tariff policy in the US and the weakness of the economy is one of the factors why the Lima stock market index returns almost three times the S&P500 (New York),” said Ramos.
Another factor that helped boost the local stock market is the high prices recorded for raw materials. Ramos pointed out that since the Peruvian stock market is concentrated around 50% by mining stocks, the profitability of its index is a reflection of the main metals.
“That the price of gold, copper, and tin have had significant increases, that generates a benefit not only for those miners, but for all Peruvian companies. Because this allows for a strong sun, generates macro stability and the possibility of having controlled inflation. It is a catalyst for other sectors,” he said.
Dividends
When investing in the stock market, profits come not only from the rise in prices that the shares may register, but also from the distribution of dividends (proportion of profits) that the companies may make.
According to Ramos, on average companies distributed 5% of their share price as dividends.
The expert highlighted the case of Fibra Prime (a securitization trust for investment in real estate income), which paid a dividend of almost 8% and its securities rose 34.5% during the year.
“In 2025, the Peruvian market has distributed more than S/38,000 million in dividends, with an average of 5.1%, much higher than the average of developed markets. These figures position Peru as one of the most generous markets in dividends in the region. Investing in the BVL has not only been a bet on valuation, but also on constant cash flow,” he commented.
With potential to rise
The ‘rally’ achieved in share prices would lead one to think that stock market assets have little or no room to rise. However, according to Ramos, there is potential. Based on the indicators that allow us to measure whether the shares are cheap or expensive (PER index), he pointed out that the BVL securities would be trading, on average, 35% below the historical peak reached, which would suggest that they still have room to rise.
Furthermore, another factor that has boosted stock market shares is investor demand, especially from the retail segment. This is thanks to the facilities of many SABs in offering platforms that facilitate investment, as well as the largest offering of securities on the Lima stock market.
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