A stock exchange is undoubtedly the most important component of any stock market, facilitating the trading of stocks and
Posted: Sun May 08, 2022 10:15 am
A stock exchange is undoubtedly the most important component of
any stock market, facilitating the trading of stocks and other
securities. An organized exchange gives Companies the opportunity
to raise capital through listing and allows for information to be
exchanged, through a broker, regarding prices and volumes so that
investors can buy or sell securities at a price.
In the Caribbean, there are more than a dozen national Stock
Exchanges but only one formalized regional securities market known
as the Eastern Caribbean Securities Exchange (ECSE). Among the
largest are the Jamaica Stock Exchange (JSE), the Trinidad &
Tobago Stock Exchange (TTSE) and the Barbados Stock Exchange (BSE).
The JSE, which is the oldest Exchange in the region, was
incorporated as a private limited company in August 1968. The TTSE
was formally opened in 1981 under the auspices of the Ministry of
Finance and the BSE, formerly known as the Securities Exchange of
Barbados (SEB) was established in 1987. These Exchanges offer the
market a range of investment opportunities comprising equities,
mutual funds and government bonds.
The JSE which has a market capitalisation of $559.31 billion
(US$4.79 billion), has 58 securities listed on the main market,
namely common stock and preference shares. The JSE also lists
corporate bonds; however, none are currently traded on the Exchange
as all were de-listed at the end of last year. Government of
Jamaica (GOJ) bonds are not listed on the JSE but are traded by the
Bank of Jamaica (BOJ) on an electronic platform on the over the
counter market (OTC). The TTSE however implemented an electronic
bond platform in 2008 on which 16 government bonds are currently
traded. Apart from these bonds, there are 38 local and regional
stocks listed on the TTSE with a total market capitalization of
approximately TT$76 billion (US$12 billion). Three mutual funds are
also traded on the TTSE and in June of this year, a Corporate Bond
Market was established with the listing of three bonds issued by
Scotiabank Trinidad & Tobago Ltd (SBTT). The BSE is the
smallest of the three with only 26 listed Companies on the regular
market and a market capitalization of BD$8.45 billion (US$4.28
billion). Ranking by market capitalization, the TTSE is currently
the largest exchange in the region.
Besides the regular market, all three Exchanges have a junior or
secondary market for the purposes of attracting smaller Companies.
The JSE Junior Market, which was established in 2009, and offers
many incentives for small to medium Enterprises with capital of $50
million to $500 million. One of the main benefits of the JSE Junior
Market is the tax holiday. Provided that the Company remains listed
on the Stock Exchange for 10 years, it will be exempt from paying
corporate income taxes during the first five years that it is
publicly traded. In years five through 10 on the Junior Market, the
Company will be eligible for a 50 per cent reduction on corporate
income taxes. In October 2009, Access Financial Services Ltd (AFS)
became the first Company to list on the JSE Junior Market.
Since then, more Companies have been added, namely Blue Power
Group Ltd (BPOW) and Jamaican Teas Ltd (JAMT). Currently the Junior
Market has a market capitalization of $2.25 billion and has gained
80.53 per cent year-to-date, to 270.81 points after peaking at
317.36 points in May.
The TTSE has a similar market which it refers to as the
Second-Tier Market
Looking at market liquidity, the JSE by far, sees the most
volume traded on average daily. The TTSE Composite Index has
advanced over the years and on the other hand, trading activity on
the BSE is quite infrequent and there are days when no activity
occurs.
Another component, common to all three Exchanges is a Cross
Listed Index, as in 1991 the JSE, TTSE and BSE entered into an
arrangement for cross border listings and trading of securities.
Since then, Companies such as GraceKennedy Ltd (JSE: GK; TTSE: GKC)
have taken advantage of the opportunity to list on all three
Exchanges. GraceKennedy however, made the decision in March of
2010, to de-list from the BSE due to inactivity and the associated
cost. Despite this, the BSE still has five companies on its Cross
Listed Index, surpassing Jamaica which only has First Caribbean
International Bank (FCIB), Guardian Holdings Ltd (GHL) and Trinidad
Cement Company Ltd (TCL). In addition to GKC, the TTSE carries 10
Companies on its Cross Listed Index, seven of which are Jamaican
Companies such as National Commercial Bank of Jamaica Ltd
(NCBJ).
These exchanges have also been spearheading efforts for a new
Caribbean Exchange Network (CXN) that will initially harmonize the
three stock markets via a common trading platform.
Deirdre Witter, SSL In The Money Wednesday, August 25, 2010
Questions:
Describe the formalized regional stock exchange
including its roles and functions.
any stock market, facilitating the trading of stocks and other
securities. An organized exchange gives Companies the opportunity
to raise capital through listing and allows for information to be
exchanged, through a broker, regarding prices and volumes so that
investors can buy or sell securities at a price.
In the Caribbean, there are more than a dozen national Stock
Exchanges but only one formalized regional securities market known
as the Eastern Caribbean Securities Exchange (ECSE). Among the
largest are the Jamaica Stock Exchange (JSE), the Trinidad &
Tobago Stock Exchange (TTSE) and the Barbados Stock Exchange (BSE).
The JSE, which is the oldest Exchange in the region, was
incorporated as a private limited company in August 1968. The TTSE
was formally opened in 1981 under the auspices of the Ministry of
Finance and the BSE, formerly known as the Securities Exchange of
Barbados (SEB) was established in 1987. These Exchanges offer the
market a range of investment opportunities comprising equities,
mutual funds and government bonds.
The JSE which has a market capitalisation of $559.31 billion
(US$4.79 billion), has 58 securities listed on the main market,
namely common stock and preference shares. The JSE also lists
corporate bonds; however, none are currently traded on the Exchange
as all were de-listed at the end of last year. Government of
Jamaica (GOJ) bonds are not listed on the JSE but are traded by the
Bank of Jamaica (BOJ) on an electronic platform on the over the
counter market (OTC). The TTSE however implemented an electronic
bond platform in 2008 on which 16 government bonds are currently
traded. Apart from these bonds, there are 38 local and regional
stocks listed on the TTSE with a total market capitalization of
approximately TT$76 billion (US$12 billion). Three mutual funds are
also traded on the TTSE and in June of this year, a Corporate Bond
Market was established with the listing of three bonds issued by
Scotiabank Trinidad & Tobago Ltd (SBTT). The BSE is the
smallest of the three with only 26 listed Companies on the regular
market and a market capitalization of BD$8.45 billion (US$4.28
billion). Ranking by market capitalization, the TTSE is currently
the largest exchange in the region.
Besides the regular market, all three Exchanges have a junior or
secondary market for the purposes of attracting smaller Companies.
The JSE Junior Market, which was established in 2009, and offers
many incentives for small to medium Enterprises with capital of $50
million to $500 million. One of the main benefits of the JSE Junior
Market is the tax holiday. Provided that the Company remains listed
on the Stock Exchange for 10 years, it will be exempt from paying
corporate income taxes during the first five years that it is
publicly traded. In years five through 10 on the Junior Market, the
Company will be eligible for a 50 per cent reduction on corporate
income taxes. In October 2009, Access Financial Services Ltd (AFS)
became the first Company to list on the JSE Junior Market.
Since then, more Companies have been added, namely Blue Power
Group Ltd (BPOW) and Jamaican Teas Ltd (JAMT). Currently the Junior
Market has a market capitalization of $2.25 billion and has gained
80.53 per cent year-to-date, to 270.81 points after peaking at
317.36 points in May.
The TTSE has a similar market which it refers to as the
Second-Tier Market
Looking at market liquidity, the JSE by far, sees the most
volume traded on average daily. The TTSE Composite Index has
advanced over the years and on the other hand, trading activity on
the BSE is quite infrequent and there are days when no activity
occurs.
Another component, common to all three Exchanges is a Cross
Listed Index, as in 1991 the JSE, TTSE and BSE entered into an
arrangement for cross border listings and trading of securities.
Since then, Companies such as GraceKennedy Ltd (JSE: GK; TTSE: GKC)
have taken advantage of the opportunity to list on all three
Exchanges. GraceKennedy however, made the decision in March of
2010, to de-list from the BSE due to inactivity and the associated
cost. Despite this, the BSE still has five companies on its Cross
Listed Index, surpassing Jamaica which only has First Caribbean
International Bank (FCIB), Guardian Holdings Ltd (GHL) and Trinidad
Cement Company Ltd (TCL). In addition to GKC, the TTSE carries 10
Companies on its Cross Listed Index, seven of which are Jamaican
Companies such as National Commercial Bank of Jamaica Ltd
(NCBJ).
These exchanges have also been spearheading efforts for a new
Caribbean Exchange Network (CXN) that will initially harmonize the
three stock markets via a common trading platform.
Deirdre Witter, SSL In The Money Wednesday, August 25, 2010
Questions:
Describe the formalized regional stock exchange
including its roles and functions.