'GEARING Jamaican companies for the 21st century: New strategies and standards', is the theme of the Jamaica Stock Exchange's (JSE) symposium on June 22.
The symposium will be the focus of activities that week, when the Exchange commemorates its 35th anniversary, actually attained on February 3, this year.
"Our symposium looks to the future to the targets we have set for ourselves and towards the milestones we must reach in order to meet the expanding needs of our various stakeholder groups as well as the demands facing any modern stock exchange," says Marlene Street, the JSE's newly appointed general manager.
"One important outcome that we would anticipate is that the proceedings will assist us to strengthen our foundation for attracting new companies to the market."
Edward Kwalwasser, group executive vice-president, New York Stock Exchange (NYSE), will deliver the keynote address on the theme of the symposium. A look back at the JSE's first 35 years is impressive in showing how far the Exchange has come. At the close of its first day of business on Monday February 3, 1969, about 3,455 units traded with total value of about 2,425. At the U.S. dollar exchange rate of US$2.40 to the pound at the time, that would have been a grand sum of around US$5,628. The Jamaican pound, on par with the British pound, was the official currency until September 8,1969, when decimalisation and the Jamaican dollar were introduced. On that first day of trading, there was activity in 23 of the JSE's original 34 securities listed and eight of those are still being traded actively today BNS, Carib Cement, Carreras, Gleaner, Goodyear, Jamaica Producers, and Lascelles.
FAST FORWARD
Fast forward 35 years to the close of trading on Tuesday February 3, 2004. Twenty-nine of the JSE's 42 listed securities traded. Volume exceeded 17.5 million units valued at J$81.92 million or about US$1.4 million. On February 3, 2004, JSE data show that:
"Volume had increased over five thousand times and values close to 250 times. Share prices had appreciated more than 74,000 times, reflected in the movement of the JSE Index, established at 100 points in June 1969. Even when adjusted for inflation, estimated at 645 per cent, point to point, this growth dwarfs the movement of every major world index during the same or comparable periods. Consider, for example,
the growth of the following major Dow Jones Industrial Average, 11.1 times; NYSE Composite, 12.4 times; FTSE All Share Index, 8.1 times. (Continuous data available from 1980 only).
"Market capitalisation had ballooned from $146 million to $ 573.5 billion.
"The number of shareholders had increased from an estimated 2,000 in 1969 to more than 70,000.
"Close to $8 billion in new capital had been raised."
Yet, in spite of these formidable figures, the number of listed securities on the Jamaica Stock Exchange has only increased marginally moving from the 34 originally listed to a net of 42 today.
"There are a number of reasons for this seeming lack of growth in the number of listed securities," explains JSE executive chairman Roy Johnson, "not the least of which are adverse economic circumstances such as the financial meltdown in the mid-1990s. When this is coupled with perceptions held by some within the public regarding the process and cost of going public, the relatively small number of listed securities so far can be better understood. There is clearly a need to encourage corporate Jamaica to understand that going public does not mean losing control of a company.
"Increasing the number of listed companies has long been a high priority for us at the Jamaica Stock Exchange," Johnson continued. "We believe that the strategies we are now pursuing, including demutuali-sation, our participation in the push towards a functional Caribbean Regional Stock Market and our continued programme of public education will combine to achieve the desired result.
"In the meantime, issuers and investors can be confident that we operate a well-regulated market in Jamaica."
ACHIEVEMENTS
At 35, the Jamaica Stock Exchange is the oldest and largest among the English-speaking Caribbean countries and measures up favourably to core world standards. "Settlements are now being done on a delivery vs payment basis at T+3, or three business days following the day of the trade. Trades are executed on a book-entry basis, employing an electronic platform, eliminating the need for the movement of physical share certificates.
"There is trading five days per week compared with the original two days per week.
"The Central Securities Depository currently holds 78 per cent of all shares available for trading in the market, and this continues to increase daily. The Depository operates on a real time basis, and since inception in June 1998, has not had a single failed settlement."
Other topics and speakers included in the JSE symposium are:
'How to list successfully on the Jamaica Stock Exchange' Ryland Campbell, chairman, Capital & Credit Merchant Bank.
'Establishing Corporate Governance in Emerging Markets' Christopher Bovell, attorney-at-law and chairman, Dyoll Group Ltd.
'New Accounting Standards' Linroy J. Marshall, president, Institutes of Chartered Accountants.
'Regulatory Compliance & Changes: A Local Perspective' Brian Wynter, executive director, Financial Services Commission.
The public is invited to consult the media for additional information on the JSE symposium.
(This column is part of the on-going public education programme of the Jamaica Stock Exchange)
