AS part of its continued attempt to broaden its product offerings and make itself a global stock exchange, the Jamaica Stock Exchange (JSE), through the Jamaica Central Securities Depository (JCSD), will be launching direct market access (DMA) shortly with a central focus on the Canadian stock market.

According to Investopedia, DMA refers to access to the electronic facilities and order books of financial market exchanges that facilitate daily securities transactions. DMA is the direct connection to financial market exchanges that makes the completion of a financial market transaction final.

The JSE discussed this prospect at its 2020 annual general meeting, but was delayed in its implementation due to the challenges which were brought on by the novel coronavirus pandemic. DMA would allow for more exchanges to connect directly to the JSE, and vice versa.

The JSE’s 2020 annual report, indicated that DMA should have been launched in the second quarter (April to June), with Canada serving as the main market of interest. Canada’s two main stock markets are the Toronto Stock Exchange (TSX), which is the senior equity market valued at CA$3.1 trillion, and TSX Venture Exchange, which is for emerging companies that may have some venture capital backing.

The JSE is also working on the process of allowing short selling on the market. Short selling is the process of borrowing a stock from your broker, selling it on the market, repurchasing the stock at a lower price and pocketing the difference, after returning the stock to the broker. The JSE is also collaborating with the Bank of Jamaica to allow for the trading of government bonds. This would be the newest market after the creation of the private market in 2020, which would be followed by its new green Bond Market. The JSE Bond Market had no trades during 2020.

Due to the pandemic, the JSE only had 5 new listings compared to its revised target of 10 new listings during the year. Despite Future Energy Source Company Limited being the only new listing so far in 2021, the JSE is projecting that there will be 14 new listings in the remaining half of the year. Only Sygnus Real Estate Finance Limited has publicly stated its intention to come to the market, with many prior market aspirants are still waiting for the financial environment to improve. Alliance Financial Services Limited had attempted to list on the market following the publication of its prospectus in December 2020 but, due to a related party issue, the sale of offer has been on indefinite suspension since January.

The JSE is currently upgrading its website and mobile application, which is expected to appeal to its growing base of new investors. In adiition, the JSE also upgraded its ecampus website in 2020. Several member dealers began to utilise the JSE’s jtraderpro website to facilitate trading in 2020, with another one expected to join in 2021. The JCSD added 25,038 new investors in 2020, largely due to the TransJamaican Highway Limited initial public offering (IPO) which was the largest IPO in Jamaican history, with the National Road and Operating Construction Company raising $14.1 billion. The JSE has a 2023 vision to operate in over 5 countries across the Caribbean and have over 150 listings. The JSE’s current listing count stands at more than 130 securities. The JCSD Trustee Services Limited is expected to be fully automated in 2021, with plans to expand the business to other Caribbean territories.

The JSE’s total consolidated revenue declined by 9 per cent to $1.71 billion, with its net profit falling by 22 per cent to $409.94 million. This was largely due to its cess income dropping by 46 per cent to $380.02 million as market transactions declined by the same percentage to $49.92 billion for the main market along with the Junior and USD Equities market. Cess as a percentage of revenue dropped from contributing 37 per cent of earnings to only 22 per cent in 2020 as the market erased more than 22 per cent of its overall value. Although transactions have begun to pick up again on the market, the JSE’s total revenue decreased by 19 per cent to $410.44 million in the first quarter.

Net profit dropped by 41 per cent to $74.13 million. Derrimon Trading Company Limited, Proven Investments Limited and Sygnus Credit Investments Limited all had successful additional public offerings (APO) in 2021. Panjam Investments Limited, Sterling Investments Limited and Pulse Investments Limited have partially shafted their APO plans after getting shareholder approval in 2020.