THE signal of urgency sent by Finance Minister Audley Shaw to the Jamaica Stock Exchange’s proposal to have Government bonds traded on the secondary market gives us reason to hope that this matter will be dealt with quickly by the Cabinet.

In fact, a finance ministry source was reported by the Business Observer last week as saying that if the proposal was approved it would be fast-tracked.

The Jamaica Stock Exchange (JSE), we expect, would have delivered its proposal to Minister Shaw by Tuesday in keeping with the one-week deadline he requested.

According to the JSE, the public trading of Government bonds is a “potential enhancement now made possible as a by-product of the recent Jamaica Debt Exchange (JDX) and its accompanying legislation, which significantly reduced the number of securities and made electronic buying and selling, rather than manual paper-based transfers, possible”.

The JSE executives have argued that by making Government debt tradable on the stock exchange, investors stand to benefit from more market information and potentially better prices on what would be a more efficient and transparent secondary market.

Investors, they added, would be able to track the performance of their investments and expect greater public interest and participation in buying and selling Government bonds.

Transparency in any business is always good and should be encouraged in every way possible. In this instance, we believe that it would create a greater level of liquidity and improve the JSE’s revenues.

We share the view advanced by the JSE that all these factors should serve to make Government securities more attractive to local and international investors and will likely translate into less demand-side pressure on the Government to increase the interest rates of future issues.

We also believe, like the JSE, that the Government would see a better regulated secondary market that will serve as an indicator of future demand for its debt securities.

And, as Mrs Marlene Street-Forrest, the JSE general manager told us last week, Government ought not to take on trading responsibilities. That, we agree, is a function for the private sector.

It is therefore our hope that Minister Shaw and the executive will push this issue, just as they did the successful JDX for which Mr Shaw won well-deserved plaudits from the Times of London newspaper, which held up Jamaica’s debt management programme as an example to heavily-indebted Greece.

Minister Shaw, it appears, is turning out to be quite a success, having managed to convince almost 100 per cent of all bond-holders to participate in the JDX.

In addition, as we noted in this space two months ago, he has secured, as he said he would, cheap loans from the multilateral financial institutions.

In fact, the $200 million in policy support that he sourced from the World Bank at one per cent interest, and the more than $1 billion he negotiated from the Inter-American Development Bank at 1.23 per cent interest are cheaper than the three per cent he said he could get — a claim for which he was ridiculed by his detractors.

Getting government bonds traded on the Stock Exchange would be another feather in his cap and one from which the country should benefit tremendously in the long run.