Reforms Needed Before Caribbean Stock Exchange Becomes Reality

by Amanda Banks, Tax-News.com, London

30 June 2004

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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