Sep 2006 Financial News

Trading falls by more than half (Barbados)

Sep 18, 2006

Between January and June this year, the Barbados Stock Exchange (BSE) experienced a 59.11 per cent fall in the volume of shares traded on its three markets compared to the same period last year.

While in 2005 the half-year value stood at just over $97 million for the first six months of this year, the value of the stocks on the regular, odd-lot and put-through markets was at about $33 million.

This led to a 65.52 per cent decline in the value of the stocks traded on its markets for the first half of this year over the same period in 2005.

Over the first two quarters of this year, 6 785 402 shares were traded, compared to more than 16 million by the second quarter of 2005.

This is according to the stock exchange's recently released sixth-month trading activity report.

General manager of the BSE, Marlon Yarde admitted to the BARBADOS BUSINESS AUTHORITY that these results might seem alarming, but offered a context for the situation.

He pointed out the region's markets had experienced a five-year bull run that ended in 2004 which saw stock prices rise "appreciably", hence the subsequent decline in share prices was viewed by some observers as a "market correction" for stock prices that had become "overvalued".

Yarde also pointed out that some listed companies had their profits eroded by rising operating costs, and the local market was dominated by institutional investors who paid attention to such fundamentals and were less attracted to those shares.

He noted that some of these institutional investors had also reached the thresholds for their equity holdings, especially institutions in Trinidad and Tobago, which had led not only to a slowdown in buying but to institutions shedding stocks from their portfolios.

However, given the projected activity from a number of pending transactions, Yarde said, the BSE expected it would still achieve its trading activity target by year-end.


Source:

The Nation News (Barbados)
Monday 18th September, 2006

http://www.nationnews.com/story/289287488791675.php