By Dennise Williams, Staff ReporterTHAT shattering sound you hear is the main index of the Jamaica Stock Exchange (JSE) breaking the 100,000 mark. According to Mark Walters, vice president of Treasury and Asset Management at Dehring Bunting & Golding, "History has been made today as the JSE index soared through the 100,000 barrier." Orville Johnson, chairman of Today's Money Ltd explained, "It's the longest bull run we have seen in this country. And there is nothing that suggest that the market has peaked."
Leo Williams, managing director of JMMB Securities exclaims, "It does carry a message that from 1969 when we started at an index of 100, that 35 years later if someone had the insight to invest from 1969, they would have seen a 99,900 percent increase on their money." Year to date the main index has leaped by 111.51 per cent. On April 1, 2003, the JSE's main index was at 47,279.73. At the beginning of 2004, the main index started at 67,736.58.
The main drivers behind the galloping JSE are:
Profitable companies
Investor confidence in the economy
Low interest rates
Explained Mr. Johnson, "Companies are profitable, interest rates are falling, and there is a lot of money in the money market looking for a home, and the so the returns are great." States Mr. Walters, "Of equal importance in the re-surgence of confidence in the economy which has also kept the dollar from sliding despite the presence of heavy liquidity in the money markets." Mr. Johnson agrees. "The foreign exchange market is stable as people are not hedging against the local currency. There is some confidence in the stability of the currency going forward."
Describing the overall market, Mr. Johnson explains, "Activity in the market is hectic and the volumes have gone up pretty high." Glen Warren, senior risk and research analyst at Guardian Asset Management takes a more sedate view. "It signals investor confidence in the market. It's an important milestone in the JSE. But in my mind, 100,000 is no different than any other figure. You acknowledge the achievement and move on. But it is a good psychological milestone." Mr. Warren believes that an additional driver of the market is the institutional investor. "I think the existing players are being bullish." And the projections are that the market will only go higher. States Mr. Walters, "April is also one of the most liquid months as over $34 Billion in COSH maturities alone will enter the system spurring more interest rate reductions and fuelling further growth in the equities market." And for the small investor, there are opportunities to participate in the bull run. States Mr. Johnson, "the man on the street can participate in the market through unit trusts, mutual funds and equity linked insurance policies. There mustn't be the perception that JSE for the big man. You can invest in the market." Mr. Williams agrees, "Investors can be apart of the market for as little as $10,000."
