Stock market heads advocate for greater collaboration
AT least three heads of stock markets across the Caribbean have agreed that working together as interdependent entities will better help to mobilise the free flow of capital across countries of the region.
Speaking at the Jamaica Stock Exchange’s (JSE) 18th regional investment conference on Wednesday, Marlene Street Forrest, managing director of the JSE; Eva Mitchell, chief executive officer (CEO) of the Trinidad Stock Exchange (TTSE); and Marlon Yarde, managing director of the Barbados Stock Exchange (BSE), all supported the need for greater collaboration among individual exchanges.
They said that while calls have been made for the establishment of a regional stock exchange, to pool more funds across the Caribbean, working together presents a much better alternative.
For Street Forrest, she said that rather than seemingly feeding into the need to compete against each other, stock exchanges across the Caribbean should allow for greater collaboration to take place. She said that while this is largely possible, the will to get it done currently poses as one of the greatest inhibitors.
“I do think there are some very ambitious objectives from a policy perspective and from our economic sustainability for the region in terms of reducing our food import bill and energy consumption. We have a lot of initiatives that will require capital and in order for us to address them, I think we need to collaborate/ integrate so that the capital, now valued at US$57 billion across the region, can flow in a more efficient manner,” Mitchell said.
“I also don’t think that we are that far apart as we think we are in terms of interoperability. At one point in time we were on the same trading platform. We are now on different platforms but technology allows us to still integrate,” she added, noting some similarities around products, participants and legislative frameworks which she believes makes it also easier for the stock markets to collaborate.
Currently there are about eight active stock markets operating across the Caribbean Community (Caricom), which pundits believe conflicts with the Caricom Single Market Economy (CSME) mandate. In the current setup, Trinidad, Jamaica and Guyana leads the pack with capitalisation averaging between US$3-US$15 billion.
Yarde further said that while working together will definitely help to get things done for the benefit of people across Caricom, he sees the merger of various regulatory requirements as a much better solution.
“We need to find ways to merge the regulatory frameworks under which we operate.
There are just as much stock exchanges in the region, with regulators having their own rules, requirements, fee structures and everything else and nobody looks at that. If we should, however, take a holistic view of things and not only look at stock exchanges but also the regulatory framework in which we operate, I believe we can work together in looking at a model that can benefit all of us as well as the economies of the Caribbean,” he said.
Stressing the need for exchanges to create more wealth, Street Forrest cited the need for increased market education and investments in technology among some of the immediate steps being taken by the JSE to mobilise more capital.
Commenting on the TTSE, Mitchell said, “We are expanding our participants, we are expanding our pools and we are positioning ourselves to become a best-in-class exchange, one that will quell the constraints of our international investors and one that will look attractive by world-class standards.”
Yarde, in singling out the BSE as the smallest of the three exchanges, said that the entity in its quest to unlock more wealth for that country will continue to work on a number of initiatives, even as it looks outside to grow the platform.
“We’ve been working with the small business association and the Ministry of Energy and Business Development in partnering with getting funding from the Caribbean Development Bank to develop an ecosystem for small and medium-sized enterprises to bring them to a stage where they can go to the market, raise capital and list on our innovation and growth market.
“We’ve seen improvements in our trading activity for 2022 where volumes increased by 78 per cent and values by 33 per cent, but we still have a long way to go to surpass our 2019/20 numbers,” he stated.