EDITORIAL: Get moving with PSD
IN the flurry of discussions about private sector-led development and the role that sector can play to boost economic progress, came some very useful observations.
While the aim here is not to discuss all of what was said, or even half, there is one point which the head of Massy Holdings Limited Gervase Warner made and which should not be ignored by economic policymakers acting in accordance with private sector personnel. It has to to do with the regional capital market development and in particular trying to find ways to stimulate more activity into those stock markets which have not been as active as the countries and investors would like.
Warner, the CEO of Neal and Massy Holdings Limited, Trinidad and Tobago headquartered conglomerate, also said that the markets in this region are small. He also believes that there are too many stock exchanges in the Caribbean and that a single one which when fully active, could do what is appropriate for investors.
His points are well taken and our view on this is that good suggestions need to be explored and where possible, followed up. The most active market in the Caribbean is that in Jamaica which has been doing quite well, year after year. In fact, noting that the Jamaica market is more dynamic, Mr. Warner admitted that such dynamism is what led Massy Holdings Limited to take out a listing in Jamaica and that they are looking forward to the better returns from doing business on the Jamaica market.
The question however, is how to bring other markets up to scratch and to make them more competitive and robust not to the point of what happens in the USA, but along a certain line of development that regional economies canbenefit.
The best known segment of the capital market is the market for the trading of stocks, bonds and the range of government instruments.
Major stock exchanges like the New York, London, Toronto, German, Tokyo and others fit this category for the selling/buying of stocks, shares and other instruments. Corporations also sell a huge quantity of corporate notes and bonds to raise long term funds which are then used to finance expansions, business acquisition
Trading on a stock exchange is also governed by regulations and regulations and formal procedures designed to ensure both competitive pricing of shares and an active market for the stock of the largest financially stable companies, said one authority on this subject.
While this appears sound, and no one will dispute those views, the point must be made that the Caribbean is still in the developmental phase of stock exchanges and their activity which they generate regularly. Therefore it will take some time we hope, for the capital markets across the region to reach greater heights and as such be a catalyst for more financing being injected into the regional economies. It would be up to the governments and other stake holders to design ways that we will be able tosee improvements.
Governments in their quest to boost private sector development (PSD) must come up with the appropriate policies which can be attractive to entice people who wish to purchase/sell shares.
The prolonged recession and now COVID have taught us lessons on how to move forward.