42% return on the local stock exchange — Street Forrest

42% return on the local stock exchange — Street Forrest

Business reporter

Friday, February 08, 2019

Print this page Email A Friend!

With investors earning on average of 42 per cent return on the capital market since 2013, Managing Director of the Jamaica Stock Exchange, Marlene Street Forrest believes that the decision on whether one should put their money in a savings account or invest in the capital market has been made easier.

According to Street Forrest, business and investors alike have benefited from some $70 billion mobilised by Jamaica's capital market over the past six years, while the Government has seen an increase of over 500 per cent in taxes from companies, both small and medium-sized, that have listed on the stock exchange during the period.

“The stock market provides a good avenue for people to mobilise capital, for the companies that want to get capital, its turning savers into investors,” Street Forrest said. She was speaking at a Symposium hosted by the Banking and Finance Department at the University of Technology, Jamaica on Wednesday.

The event, which was themed 'Growth and development: Is expanding the capital market the answer?' brought together IMF Representative for Jamaica, Constant Lonkeng-Ngouana; Associate Dean for Graduate Studies at the University, Dr Andrea Sutherland; Chief Investment Strategist and Head of Research, JN Fund Managers, Ramon Small-Ferguson; Small Business Association of Jamaica (SBAJ) president, Hugh Johnson; Group CEO of Jamaica Corporate Credit Union, Robin Levy and Street Forrest under one roof to discuss the issue.

“Savers who are earning one per cent on their money, had they invested the money, they could have earned up to 42 per cent on average from the Main and Junior market. The US-denominated market is 16 per cent.

“So if you take the 16 per cent, you are way above inflation, you are above what you could have earned at the bank and what it is doing is accelerating the growth and development of the country,” Street Forrest reasoned.

She argued that the Government's decision to offer a tax incentive to small companies willing to raise capital by giving up a portion of the business ownership, has augured well for the country, which moved from 2 per cent of the population investing in the capital market, to roughly 15 per cent last year.

“The global average is 25 per cent, so we still have some way to go but we are moving in a positive direction,” she said.

Street Forrest's sentiments were echoed by JN's Small-Ferguson and IMF's Lonkeng-Ngouana, who reckons that the growth in the country's capital market follows on the reduction of Government of Jamaica debts becoming less available.

“It has forced people in the financial sector to invest more appropriately. So banks are now deploying more capital into loans which is what we should have been doing, and people in investment management space have to become more creative in how we drive the capital.”

He noted that with the “easy money” being gone, retail participation in that space has gone down significantly and instead the country is seeing individuals and companies participating in collective investment schemes, mutual funds, unit trusts among others, allowing for more appropriate allocation of capital.

Now you can read the Jamaica Observer ePaper anytime, anywhere. The Jamaica Observer ePaper is available to you at home or at work, and is the same edition as the printed copy available at http://bit.ly/epaperlive




1. We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper � email addresses will not be published.

2. Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.

3. We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.

4. Please do not write in block capitals since this makes your comment hard to read.

5. Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed: advertising@jamaicaobserver.com.

6. If readers wish to report offensive comments, suggest a correction or share a story then please email: community@jamaicaobserver.com.

7. Lastly, read our Terms and Conditions and Privacy Policy

comments powered by Disqus



Today's Cartoon

Click image to view full size editorial cartoon