El Salvador holds mass trial of alleged gang members for 29,000 murders

The investable read-through is not the trial itself but the normalization of extraordinary state power. That creates a medium-term regime where domestic security metrics can improve while institutional risk premia quietly rise: lower street crime can support tourism, retail, and local consumption, but the same policy mix raises the probability of arbitrary detention, delayed capital formation, and higher sovereign risk spreads if external partners start pricing governance erosion more aggressively.

The second-order winner is any part of the Salvadoran economy tied to perceived stability rather than rule-of-law quality. Hotels, airlines, remittance-linked consumer spending, and select infrastructure names can benefit if the government sustains the crime reduction narrative into the next 6-12 months; the loser set is harder to see but larger over a 1-3 year horizon, including private equity, nearshoring, and any issuer that relies on international lenders or multilateral support, where due-process concerns can become a funding-cost tax.

The key risk catalyst is not a reversal of the crackdown but a mass-due-process incident: a high-profile wrongful conviction, prison death spike, or sanctions/aid backlash from US or EU stakeholders. That would likely widen spreads and compress local asset multiples faster than any crime-data improvement can offset, because the market can tolerate hard security policy more easily than persistent legal opacity. The consensus is probably underpricing how durable Bukele’s domestic approval is while overestimating how much that approval insulates the sovereign and quasi-sovereign ecosystem from external capital market punishment.