Dennise Williams, Staff Reporter
NOT ONLY is a regional stock exchange unwarranted, it is unnecessary, says Trevor Blake, general manager of the Eastern Caribbean Stock Exchange (ECSE).
He was speaking to the Financial Gleaner on Tuesday about what he said were the dim prospects for the development of a regional stock exchange. Mr. Blake's view sharply contrasts the published position of the Jamaica Stock Exchange (JSE) regarding the amalgamation of all the Caribbean's separate stock exchanges.
"Within CARICOM there are seven stock exchanges. None of the seven would be willing to give up its position in its respective market. So a single Caribbean stock exchange is a far way off."
However, if it were to come into being, Mr. Blake sees two main advantages. "A single exchange would be so advantageous a creation. A single exchange would allow CARICOM brokers to operate in any island and allow CARICOM companies to list on any exchange."
That said, he notes, "The development to date of most of the Caribbean exchanges has been on the national level. Take Jamaica for example. The JSE has a long history, but it operates like a club and that works for its members. The same could be said for the other five exchanges. So while they play lip service to regionalization, for them, there is no incentive to integrate."
REGIONAL EXCHANGE
Mr. Blake points out that, "The ECSE has built the only regional exchange in the Caribbean."
The ECSE trades corporate stocks, bonds and government securities - for the eight member territories of Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines.
Currently there are nine stocks listed on the ECSE with a market capitalisation of EC$11 billion or US$4.4 billion. However, the exchange trades daily and has a settlement process of 'T plus one.' That is, after a transaction (T) the money is paid over the next day.
And because of this, Mr. Blakes says, "We are the most efficient exchange in CARICOM."
Mr. Blake also notes that his exchange has no immediate plans to become a publicly traded company. "We are a limited liability company. We are not a membership club like the rest of the exchanges in CARICOM."
And as to the possibility that the ECSE will follow the JSE in listing on its own exchange, Mr. Blake states, "That is something the board hasn't decided on. In fact, there are several schools of thought on whether one should list on one's own exchange. If an exchange were to list, the current members would be majority shareholders to protect their investment. So nothing really would change - it would still operate like a club."The JSE is one of the 45 shareholders of the ECSE.
