Jul 2008 Financial News

BSE to trade over the counter

Jul 01, 2008

THE BARBADOS STOCK EXCHANGE (BSE) is moving to offset the dwindling number of companies on the local market with a fresh trading platform.

The Over The Counter (OTC) market, which should be introduced by year-end, would allow companies to trade their securities without being listed or traded on the official BSE board.

Over the past five years the BSE has been hit by a number of delistings, including A.S. Brydens & Sons Ltd, Courts Barbados and BWIA, while Barbados Shipping & Trading, RBTT and Barbados Farms are expected to exit the trading board soon as a result of takeovers.

BSE general manager Marlon Yarde along with manager of compliance and regulatory reporting Kelvine Jordan-Rowe and operations supervisor of business development Terry Williams told BARBADOS BUSINESS AUTHORITY last Friday in an exclusive interview that the OTC market would invigorate smaller companies with capital and increase liquidity in the equity market.

"Eventually these companies would develop to list on our stock exchange," Yarde explained.

He acknowledged that the delisting of a number of companies from BSE was negatively affecting the market by limiting investment opportunities and this factor partly influenced the OTC market initiative.

A consulting firm was already conducting a market survey to inform the functioning of this market, which would be the first of its kind in the Caribbean, Yarde said.

Moreover, regulatory considerations were being discussed with the Securities Exchange Commission for OTC trading.

According to Williams, "It allows us to open the sphere to a lot of companies that under normal circumstances would not be of the size requirement to be listed on the stock market. It also captures some companies of critical mass which might not be willing to go to the extent of listing."