Chief executive officer of the Victoria Mutual Wealth Management, Devon Barrett, has reiterated calls for the Government to re-enter the local bond market, allowing greater access by investors to absorb the liquidity.

Speaking at the Jamaica Stock Exchange listing of ISP Finance Services Limited 10 per cent secured corporate bond on Wednesday, Barrett noted that while Jamaican bonds are easily traded on the international market led by efforts of the Government and the International Monetary Fund, the bonds are not accessible on the local market.

He implored that the Government list these bonds on the JSE bond platform. His arguments were based on capital raised by companies on the Junior Market, which to date totalled $5.73 billion through initial public offerings (IPO) and issues. That sum includes $150 million raised by ISP from the bond offer.

“The $150 million raised shows that there is no shortage of capital in the market for companies to access. However, companies have to ensure that their businesses are well structured to attract the type of capital they need,” Barrett stated. Victoria Mutual Wealth Management was lead broker for the ISP’s IPO.

Following a three-year hiatus from the domestic bond market, in January, then Finance Minister Peter Phillips stated that both the Ministry of Finance and Planning and the Bank of Jamaica were actively managing the listing of bonds, and it was expected that the Government of Jamaica would re-enter the domestic market in February to absorb an expected influx of billions of dollars in the market from National Debt Exchange (NDX) bond redemptions.

More than $60 billion of NDX bonds were due to mature in February, and the Ministry of Finance was also expected to pay out an additional $9 billion to $10 billion in interest on its portfolio of domestic debt.

Phillips stated that the Government intended to play its role to revive the domestic capital market that has been in a state of some dormancy with respect to Government issues.

“On the matter of accelerating economic growth for our country, focus needs to be placed on financing, and the use of our stock market to do so must be seriously considered. We are all aware that in order to achieve strong economic growth we need to increase our gross domestic product,” Barrett stated.

He added that the Government’s spending on capital goods is also the most direct way to create economic growth; however, due to budgetary constraints, the Government is forced to spend less than the ideal requirement of five per cent of gross domestic product on capital goods.

“One solution is the privatisation of government-owned entities and the selling of shares on the stock market to raise the much needed capital. This approach has worked for the privatised Jamaica Public Service, which has used the bond market as one source to fund their projects,” he continued, noting that some of the potential government entities to target are National Water Commission, Urban Development Corporation, Jamaica Mortgage Bank, and Factories Corporation of Jamaica.

“Not only would this benefit the economy, but it would also benefit the populace tremendously as these government entities would be better able to provide their essential services, which in some cases can be deemed as being insufficiently offered,” he said.