BSE Allows Share Prices To Move In One Cent Increments

by Amanda Banks, Tax-News.com, London

01 April 2005

The decision by the Barbados Stock Exchange to allow shares listed on the bourse to move in one cent increments has been welcomed by the local business community, it has been reported in the national press.

The new rules, which go into effect today (April 1), have been in the pipeline for some time and are an attempt by the BSE to harmonise with other exchanges in the region, such as Jamaica and Trinidad.

Under the old rules, shares listed on the BSE could only move in five cent increments if valued between $1 and $5, and in ten cent increments if valued at more than $5, a system that could often making trading an inflexible and expensive business, as head securities trader at Signia Financial Group, Chris Callender, told the Business Authority.

“Imagine if I was trading and wanted to buy ten million shares in BS&T (Barbados Shipping & Trading) and the current price is $8.60 (but) I wanted to get ahead of the next best bid and was willing to offer $8.61, but because of the rules I was stuck having to buy at $8.70, that would be a lot of money,” Callender explained.

BS&T’s chief executive officer, Anthony King also praised the introduction of the new rules, reportedly observing that the changes will encourage stock purchases and put the BSE on an equal footing with exchanges both regionally and internationally.

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