Reforms needed before Caribbean stock exchange becomes reality
Thursday, July 1, 2004
MIAMI, USA: Significant reforms need to take
place within the Caribbean’s stock markets before work can begin on the
formation of a regional stock exchange, a discussion panel was informed last
week.
Contributing to a panel discussion entitled
‘Formation of a Caribbean Stock Exchange and Promoting Non-Traditional
Investment Mechanisms’, Baljit Vohra, general manager of the Eastern Caribbean
Securities Exchange in St Kitts argued that the region’s existing bourses and
the firms listed upon them must first be demutualised.
“If we are going to talk about integration
and coming together on exchanges, first we have to demutualise them. Convert
them into shareholding companies, corporatise them even before you start
talking about cross-ownership,” he observed.
He added that a further hindrance to the
formation of a regional exchange is the value of local shares in relation to
market capitalisation, which is very low. “The average company size across the
region is small, family owned and there is the whole issue about control,”
noted Vohra.
One suggestion that arose from the symposium
was to integrate the region’s exchanges through a series of memoranda of
understanding, as illustrated by the recent coming together of the Jamaican
and Trinidad & Tobago markets.
Last week’s event was part of a conference
entitled, ‘Florida-Caribbean Collaborative Development Strategies: Positioning
Caribbean Businesses To Compete In An FTAA Era,’ and was sponsored by World
Trade Centre Miami and Caribbean-Central American Action in partnership with
Caricom.
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