Marlene Street Forrest, the managing director of the Jamaica Stock Exchange (JSE), is exuding optimism about how she believes Jamaica’s equities market will perform in 2022. Street Forrest is looking beyond current concerns about the Omicron variant of the novel coronavirus to 2022, which, she hopes, will bring an accelerated recovery from the pandemic-induced shock.

In the United States, the bull run of 2021 screeched to a halt on Friday, November 26 as more news of Omicron and border closures were disseminated. Globally, analysts note that the world’s stock markets plunged alongside oil prices and US Treasury yields Friday, after South Africa disclosed more news on Omicron, the spreading strain of the novel coronavirus.

Meanwhile, US investment advisory firm Goldman Sachs came out to warn of possible near-term economic risks from the new Omicron variant of the virus.

The JSE head and other local industry leaders are watching the developments, but in the meantime, Street Forrest notes that the JSE has been resilient throughout the pandemic. Street Forrest told the Jamaica Observer, “The market has already been sensitised that COVID-19 and the many variants will be with us for a while.”

“The full recovery of the market will depend on how seriously as a society we take the threats and deal with the risks. Given our interdependence on other markets, the impact on our market will also depend on how this new variant, Omicron, affects them and us. There are still many unknowns about this new variant, so we cannot be certain about its impact. Certainly, however, we must plan for uncertainty.”

The JSE head, addressing more pointedly the out-turn of the local market, added, “The stock market has done well despite the impact of COVID-19 and the continued uncertainties in the country and external to us, which make planning difficult.”

She outlined further that improved levels of planning and adaptation bode well for listed companies. “Most players in the market are in planning, assessment and realignment modes, which augurs well for the future. Companies for the most part have been resilient. We have also seen investors moving more rapidly towards online trading.”

Street Forrest noted that over the 12-month period, October 2020 to October 2021, the number of transactions on the JSE climbed by 13.5 per cent, while the value of trades increased by 50 per cent. She also noted that, even though the number of stocks bought and sold during the period declined by 23.5 per cent, overall, the prices have improved over 2020. The Combined Index, which captures the movements of every stock, increased year-to-date by nine per cent while market capitalisation is up 19 per cent.

There have been seven listings so far in 2021, surpassing the four that were done in all of 2020. At the same time, more than 18,698 new accounts have been opened up to September 2021.

As at the end of October 2021, the combined market capitalisation on the JSE was $1.9 trillion, up from the $1.58 trillion it was a year earlier. On Monday, the combined value of listed stocks was down slightly at $1.85 trillion.

This summary, Street Forrest said, “Speaks to improved performance to date in 2020 and also confidence in the Jamaica Stock Exchange.”

Commenting on what she believes will be the main market drivers in 2022, Street Forrest said, “Companies must continue to grow, retool and re-engineer and this is going to be at extra cost to most companies. A need for capital to mobilise these endeavours will be critical in 2022.”

The JSE head asserted, “that the market is always the best place to get patient capital and investors are appreciating that investing in the market is long term. My bet is on the small and medium-sized companies seeking additional capital and the new products that will be launched for investment opportunities. Diversification by businesses/companies listed on the exchange, access to capital by companies already listed and those not yet listed and the JSE’s own diversification strategies and market education will ensure that the market continues to grow,” she asserted.