The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Bahamas International Securities Exchange’s (BISX) low equity listings and trading volume are “not the sign of a productive exchange”, a financial analyst charged yesterday.

Richard Coulson, a panellist at a Securities Commission conference, argued that while BISX’s creation 18 years ago was “a noble start”, it had not been a success.

“Out of hundreds of [Bahamian] companies only 20 of them have chosen to list their ordinary shares on BISX, the last one being Arawak Port Development five years ago; since then, nothing,” Mr Coulson said.

“Out of those 20 companies, four of them struggle to survive. Many of them trade only once or twice a week, and days when there are no trades are frequent. That is not the sign of a productive stock exchange.”

Mr Coulson added that since 2009, 30 companies have listed on Jamaica’s junior market, a facility that BISX has long planned but been unable to create.

Keith Davies, BISX’s chief executive, speaking on the same panel, said it was “a personal choice” to list on the exchange and it could not force firms to do do.

He argued that the Jamaica Stock Exchange’s junior market listings volume was largely due to tax incentives for companies that went public and listed their shares.

He argued: “There are hundreds of [Bahamian] companies out there that have chosen not to list. Companies are choosing not to go public; that is a personal choice they have made.

“When you go public it is pretty much for one reason; that is to get capital to do something. When they choose not to go it is because there are options available to them outside of going public. The fact that they aren’t coming to the market doesn’t mean that there are deficiencies in one part or the other of the market.”

Mr Davies said many observers were simply ignoring the realities that currently exist. “For one, we are an exchange control jurisdiction, which means that any one who is resident for exchange control purposes can access our market; anyone else is excluded unless the Central Bank allows it. That is a reality,” said Mr Davies.

“We have to work with what is in front of us. We have been around since 2000. For half of that we were wandering around the wilderness trying to find our feet. In that time we started off with people not even knowing what a security was. When I started in this industry, I was one of a few lawyers who understood what a security was. In terms of financial literacy there was a huge gap.”