The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas International Securities Exchange’s (BISX) All-Share Index suffered a more than 100-point drop in 11 days last month - a period coinciding with the failed CIBC FirstCaribbean deal.

The Index, which measures combined share price movements among BISX-listed equities, fell from 2,072.37 to 1,963.79 between February 4 and February 15. Analysts suggested the decline was driven by slippage in the share prices of both CIBC FirstCaribbean International Bank and Commonwealth Bank, which both have large market capitalisations.

CIBC FirstCaribbean’s share price fell from $11.24 to $10.20 over that 11-day period, while Commonwealth Bank’s dropped from $3.50 to $3.10. Both declines were around the ten percent threshold, with investors also likely to have been unnerved by the losses and increased provisioning associated with COVID-19.

CIBC FirstCaribbean International Bank (Bahamas) plunged to a $63.543m net loss for the year to end-October 2020, while the collapse of efforts to sell a majority stake at the regional level also appear to have influenced market sentiment. Commonwealth Bank, too, has seen its profits impacted by loan loss provisions associated with the pandemic.

Michael Anderson, RF Holdings’ president, said: “Those are two fairly large market capitalisations, and CIBC is by far the biggest one. Those are the two key movers. I think the shares that have really been doing better are some of the smaller market caps. Bahamas First has done well since it came to the market, and Bahamas Waste has done well.

“But small caps, even though they go up, don’t have a big impact on the market. Commonwealth and CIBC FirstCaribbean are big players, and it’s my sense that it’s those two that are driving it. I think the market in general is subdued.”

The BISX All-Share Index closed last night down 185.75 points, or 8.88 percent, for 2021 to-date but Mr Anderson argued that “there’s still opportunities in the market” with the recent decline in stock prices offering an opportunity for investors to buy-in at relatively good value ahead of any appreciation as the economy recovers from COVID-19.

“Notwithstanding the economic situation we have a bullish view of equities going forward,” he added. “It’s now an opportunity to take advantage of these price points. This is when dividend stocks come into greater focus for people, paying 3-4 percent dividends.

“The recovery will take a while to take effect in 2022 and 2023, but the listed companies will be among the first to benefit. You need to buy equities when prices are lower than you might expect. When prices move higher you don’t find many sellers.”