JSE needs mass appeal, not apex ventures
THE OBVIOUS underestimation, by the Jamaica Stock Exchange (JSE), of its capacity for mass appeal was again in evidence when it recently announced its pending introduction of ‘apex ventures’ to provide more options for its investors.
It intends soon to add exchange traded funds and accommodate short-selling and margin trading. This after failing in its bid to introduce a US-dollar denominated Jamaica Depository Receipt Market, which Marlene Street Forrest, managing director of the JSE, said it was not granted approval to do by the Bank of Jamaica.
The sophistication of differentiation is a global strategic marketing component, relating to a common product type or category. It is very popular in the sale of consumer products, particularly food and beverage, and to a lesser extent in the money-dealing business, such as banking and selling of securities.
However, execution, the customer experience, not the articulation or sales pitch, is the greatest factor attributable to its success. Included in the experience is understanding, having the level of intellectual sophistication that may be required to derive satisfactory value from the opportunity presented. Hence the classification of the planned forays of the JSE as ‘apex ventures’.
As usual, Mrs Street Forrest has articulated the apex venture product differentiation plans of the JSE quite well.
However, it is reasonable to have expected that the opinionsampling component of the product research would have resolved any reservations of the securities dealer partners of the JSE who are integral to the successful execution of all of its marketing strategies. This is a premium relationship.
SERIOUS RESERVATION
So when Charles Ross, CEO of Sterling Asset Management, securities dealer partner, not competitor, of the JSE, ‘went to town’ expressing to The Gleaner his serious reservation about the pending JSE apex ventures, it was either in poor taste or an unflattering commentary about the market-research protocol of the
JSE. Ross may counter that he was affirming his independence.
I have also had conversations with Chris Berry, chairman of Mayberry Investments, about his similar public berating of the business practice of the JSE, of which he is an alternating director and substantial shareholder, not to mention leading playmaker by IPO sales, especially those that made the Junior Market a success.
I have assumed the role of capital market evangelist. This is to register my disgust with the
savings-depleting banking-fee culture, especially in Jamaica, that is based on the oligarchy and hostage-taking collusion by the banks to indirectly tax and frustrate captive customers who risk being accused of money laundering and having their property seized by the Govern-ment, or thieves, if they do not bank their money.
My support for the JSE, as an alternative to maintaining large bank deposits and taking bank loans for business, therefore, is natural.
I’d rather promote a culture of buying securities. To grow this culture, the JSE needs to develop marketing strategies to increase its mass appeal, instead of putting its energy in promoting apex ventures that make it seem like it is competing with its dealer partners for high-net worth investor subscriptions that they should direct naturally to the stock market.
The JSE needs to have
investment conferences and marketing roadshows in the diaspora to counter JAMPRO’s adverse sales approach to attract foreign direct investment by foreign companies that repatriate profits to develop their countries. It should invest substantially in capital and securities investment education for the general public.
In its 50th year of existence, it is 50 years behind in this. Instead of a JSE Education Institute, it needs an Investor Education Foundation. It needs to invest in a National Museum of Business Development. It needs a literary documentation of the history of the Jamaica Stock Exchange.
Last, just to reiterate the point I made in a previous submission, the JSE needs to manifestly show that banks do not control its operations, not just say it is not so.