The Jamaica Stock Exchange (JSE) has indicated that it could, by next year, deliver on plans to commence the much-awaited trading of government securities.
Managing director of the JSE Marlene Street Forrest, speaking at the company's 45th annual general meeting last Thursday, said the objective ranks high on the entity's list of strategic goals for 2022 and beyond.
"We are currently working with the Bank of Jamaica (BOJ) and the Ministry of Finance in order to deliver on that particular promise. For 2023 we should see this being realised. We have been putting the plumbing in place, so now we are going to push through with the delivery," she told shareholders.
At present, only company shares and corporate debt securities are predominantly traded on the local stock exchange. Finance Minister Dr Nigel Clarke has, over the last few years, emphasised the need for government securities to be brought to market, eyeing investment opportunities of over $30 billion. Top state assets being primed for listing are the Jamaica Mortgage Bank as well as Government's 19 per cent stake in the Jamaica Public Service (JPS).
The JSE, as it plans for further growth, said it will also, in the coming year, work toward developing new markets, products, and services for investors. Some of these Street Forrest said are to include direct market access, digital assets market, short selling, and data commercialisation.
Looking to also expand cross-listing opportunities while significantly increasing the number of listings in the next few years, the JSE, through the ramping up of its market education programmes and digital services, also wants to forge greater engagement with the Diaspora. A move which Street Forrest said was well underway. "We have been having several meeting with them throughout the United States, Canada, and the United Kingdom and what we have seen is a move where more and more accounts are being opened for investing in securities on the local exchange."
The exchange, now made up of five indices (main, junior, private, bond, US denominated), conducts trades for almost 150 securities, comprising a little of over 100 listed companies. Up to December 2021, total market capitalisation (main and junior markets) was valued at $1.9 trillion.
With just about two securities now listed to the bond market, JSE chairman, Julian Mair, said that with debt being one of the largest traded assets throughout the region, he is optimistic that the market will see more of these due to a growing list of fixed income securities now available.
The exchange, ranked globally as the best performing in 2015 and 2018 and fifth in 2019, at the end of its 2021 financial year grew profits to $497 million, $90 million above that of the prior year when it lost some ground due to challenging market conditions as a result of the novel coronavirus outbreak. Revenues for the year also climbed to $1.9 billion â€” the bulk of which continues to be driven by cess and fee incomes.
"For 2021 our results have been positive. We only have three months left for this year and we expect that the performance will be better than last year," Street Forrest said in sharing an outlook.
"We are diversifying and we will continue to do so, we will rationalise our expenses even as we continue to work on our digital transformation. For 2022 and beyond we will look at how we launch platforms and continue to pursue sustainable stock exchange initiatives and other business solutions geared towards achieving the company's strategic plans," she added.