IN 2015, the Jamaica Stock Exchange (JSE) was declared by US financial news entity Bloomberg as the best performing stock exchange in the world, a feat which was repeated three years later in 2018. Those two years were the pinnacle of market performance for the JSE which was ranked amongst the 10 best performing stock exchanges in the world for seven years. But looking back at the story of the JSE, it is hard to imagine that, 20 years ago, it would attain those heights, had it not been for the exceptional drive of a visionary leader and a dedicated team committed to contributing and executing a plan. This week’s Corporate Profile highlights the journey the JSE took under its managing director Marlene Street Forrest.

For starters, Street Forrest’s time at the JSE is now nearly at an end; she is scheduled to retire in December 2024. But the last 22 years of her life has been spent pushing to transform the JSE. Yet her journey did not start there. Before the stock exchange, Street Forrest did stints with the Ministry of Health as the parish manager for Kingston and St Andrew for the South East Regional Health Authority (SERHA), the decentralised body responsible for the administration of 10 hospitals and 92 health centres in the parishes of St Catherine, Kingston, St Andrew and St Thomas. At SERHA, Street Forrest said she became a “professional beggar” reaching out to various organisations for resources to help run various clinics because funding was inadequate to take care of the needs of those who work at and use the clinics. SERHA was her last job before taking up a post at the JSE.

Still, before that, Street Forrest spent time at the Jamaica Observer as the newspaper’s first financial controller. She was promoted after that to the position of assistant general manager and was the first to hold the post as well. The post no longer exists. She also worked in various other companies working in an accounting role, in Jamaica and in the United States of America. In Jamaica she has worked at the JPS, Xerox and even the now-defunct Jamaica Broadcasting Corporation (JBC) whose TV channel is now Television Jamaica.

Though Street Forrest has served in many roles, she lists herself as an accountant, but added a curious bit of information.

“I’m not a trained accountant. I have my bachelor’s (of science degree) in management studies,” she said as she highlighted that she gained deep knowledge of accounting on the job. “My first years of experience was in auditing. So my first job immediately out of university was with the income tax department where I was a tax auditor.” In those days, Street Forrest, who studied at the University of the West Indies from 1978 to 1981, said students studying management studies did everything, including extensive courses in accounting.

The experience she gained in the first half of her working life was leveraged for the time she would spend at the JSE. Street Forrest started working at the JSE in September 2000.

“I came as the deputy general manager of the stock exchange in charge of finance,” she said. Her manager moved on a few years after and over time, she became the general manager of the JSE and the Jamaica Central Securities Depository (JCSD).

Then, the JSE was in a loss-making position and far from the profits it reports now for its shareholders.

“And the reason for that is the exchange relied heavily on one source of revenue. That was trading fees.” Its subsidiary, the JCSD was in an even worse position. Then, it relied on a few big transactions to raise funds for operating expenses.

“To the credit of the board then, they recognised we needed to make revenues from other sources if the company was going to survive long-term,” she said.

One of the biggest perceptions the marketing team had to change was that the stock exchange was a rich man’s game.

“Then we had negative listings,” she said describing the period in early 2000s when companies were de-listing from the JSE. There was less than 1 per cent of the population investing in the market. Now that number is closer to 14 per cent.

“So, that’s not a positive game. That’s a dying man. So, the idea is that you must grow both sides. So, we set out in terms of marketing to investors and then we looked at what are some of the things that we could do to make the companies that are there more aware of what we are doing,” she recalled. She said that led to some restructuring, “but nothing major… because I believed that we could grow our way out of our problem”.

One way was to target companies for listing.

“We took up the telephone directory and looked for companies to call, and we called them. We also looked in the newspapers to see which companies were advertising and reached out to them to come and list. We literally went door to door, knocked and invited companies. I was younger then, but we went to places like Montego Bay, and we went up to some hills and cliffs with people at a small hotel to invite people to come and list,” Street Forrest explained.

To grow, other services were offered, including registrar services, that is keeping records of investors after an issuer offers securities to the public, which helped to diversify revenues for the JCSD.

It involved undercutting entities that provided the service, such as KPMG and Pan Jam, but Street Forrest was determined to make money for the exchange.

“We started with one, and that was Mayberry [Investments].”

But even though those new business lines were bringing in money, it was not enough. Street Forrest said the experience convinced her that the future of the exchange was in diversifying its offerings. Under pressure from the company’s board of directors to come up with new ideas to bring the company into profitability, she had to strategise further, because then, the JSE was under serious threat of becoming “a going concern”.

“The board said, you know, we have to come up with other strategies to assist in diversification.” This was around 2009. Jamaica’s economy then, burdened by debt, was on the brink of collapse and returned to the International Monetary Fund (IMF) for help in a programme that was abandoned shortly after.

“I remember putting on the table the idea of a Junior Market. I think that was the biggest joke for the board. They laughed at me and said ‘but we are a junior market already’. I remember the quote,” she said as she pointed as if to indicate where those laughing were sitting in the same boardroom in which this interview was being conducted. “I sort of blew my top. I got mad and stormed out of the room and that was probably the only time I had done anything like that in my life.”

She said she went home that day and cried and prayed.

However, Street Forrest said she was determined to get new listings to drive the growth of the stock exchange, and since the bigger companies were not listing, she was going after the opportunities presented by smaller companies.

She said the board considered the proposal and fleshed it out “and the rest is history”. The Junior Market was launched later that year with Access Financial Services being the first listing.

Mayberry Investments brought the first company to market.

“Chris Berry [executive chairman of Mayberry] was extremely supportive of the Junior Market from the get-go, and if you notice, most of the listings in the early days were from Mayberry,” she pointed out.

She said the listings created demand for the registrar services offered by the JCSD. But the Junior Market was threatened shortly thereafter, especially with the Government coming under pressure from the IMF to do away with the incentives given to companies to list, especially the tax breaks that were given.

“I was feeling very disappointed, especially in the Government’s viewpoint. The IMF has a cookie-cutter approach to countries like ours and how we should manage. They are not seeing some of the unwritten, cultural way of doing business. So I sort of got that, but what I didn’t get was how, based on evidence that we shared, and I don’t remember if it is two or three years or so after that, we had a challenge. But we can go back and look that the Government, even when you gave them evidence that the Junior Market did not contribute to a strain on their coffers, meaning that the net effect, because we saw where more people were being employed, we saw where the PAYE was higher, and all of that.”

She said she sought all the help she could get, but it was set in stone that in 2016, the incentives would end. Luck was however on her side. The Administration changed and the new Government decided to “go against the grain” and maintained the incentives.

Despite the success, Street Forrest was keen to point out that not all ideas worked. Ideas such as setting up a depository receipt failed. The idea was to allow Jamaicans to buy into companies abroad and to be able to trade those receipts on the local market. But this was given a cease-and-desist from the Bank of Jamaica because of the impact it could have on the currency markets.

“But let me tell you something. In my estimation, the Bank of Jamaica should have allowed it, but cap it. Because if you can cap your risk, you start something which would allow persons who would have gone into that to know their balance. “

Street Forrest said she doesn’t know if it is something she will pursue before she retires next year. She said she has had discussions about setting up a digital asset market for things like cryptocurrency trading and a commodities market.

“We need to have a regional footprint,” Street Forrest stated, adding that she wants to see more integration among regional exchanges. But, she said, that doesn’t mean there needs to be a single securities market in the region.

“What it has to do is to be linked. All exchanges can be linked technologically, so that the pain of cross-border transactions is either minimised or removed, but some laws would have to change to facilitate it. What it would mean is that when people on the outside look on the Caribbean, they would see integration. They would see a volume of business that is not splintered and they can access companies on all the exchanges using any of the markets to access them,” Street Forrest added.

She has also sought linkages with other exchanges in Canada and Ghana for growth.

And now she proposes a micro market where companies can issue an IPO to raise between $5 million and $250 million with incentives such as those given to Junior Market companies. And while her Junior Market is thriving, she wants it to grow more and has proposed that the capital limit be increased from $500 million to $750 million.

“I have had a positive response about the proposal, but I can’t say when it will be implemented,” she said.