Now is the time to get listed!

... JSE's new series of indices to guide investors

BY ABBION ROBINSON
Business reporter
robinsona@jamaicaobserver.com

Sunday, October 20, 2019

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With liquidity levels rising within the local financial market, managing director of the Jamaica Stock Exchange (JSE) Marlene Street Forrest is encouraging more local companies to get listed to access equity capital. In addition, the JSE has also streamlined a series of financial indices to guide potential investors when investing.

According to her, the level of liquidity in the market consequently influences the number of companies listed annually on the stock market and indicates how well the economy is performing, the increase in financial literacy and the public's general interest in the stock market.

“Each year, we have what is called the National Investors Education Week, this is our 12th year, and for the first time in the history of the exchange, we saw over 1,500 people participating, the majority being young adults,” Street Forrest stated.

“The Jamaica Stock Exchange is the best-performing stock exchange in the world, out of 92 other exchanges. We have moved from over 117,000 account holders in the last three years, to 261,000 account holders, an increase of 85 per cent,” she continued.

Street Forrest was speaking at the Jamaica Chamber of Commerce's business and consumer confidence indices release at Courtyard by Marriott on Tuesday (October 15).

She added that JSE's market capitalisation have moved from the $1.5 trillion recorded in 2018 to $2.1 trillion in 2019, a 40 per cent increase. While in 2018, the JSE raised $20.02 billion for companies that entered the market, based on the track record, she is confident JSE is able to improve.

“Within the market, in terms of maturity, we had about $27 billion net and this is coming back to institutions, investors and people who are just looking for a home for their funds and what they're doing is turning their attention to the stock market. Because there are investors new to the market and investors who are looking for different types of products and services, within this year in March, we launched what is called a financial index,” she stated.

Street Forrest indicated that all indices launched by JSE are a composite that is made up of various companies and sectors.

“All you do is pull out those sectors that you want special interest to be given to. Having pulled out those with their market capitalisation, you put them at a base of 100 and track their performance, in terms of that particular index. It streamlines investors into the area they want to invest, but what it also does is enable our brokers to create products,” she explained.

“We can see where that has a positive out turn, because we start an index at the base rate of 100 and the financial index is now at 141.26 points, an increase of 41.3 per cent. Really what this is saying is that it's not about the stock market, yes we provide a conduit, but it really is telling you how the economy is doing and how people are responding to the various products and services,” she continued.

Alongside the financial index, Street Forrest noted that last year October the manufacturing and distribution index was launched and indices in respect to the service and tourism sector can be anticipated for next year.


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