Rita Humphries Lewin, Chairman of Jamaica stock exchange, believes technology will help the Carribean succeed
Why go to a Carribean stock exchange when you can go to London or New York, for example?
Well first of all the stock exchanges in the Carribean offer different companies - we are not listing overseas stocks in our markets, it's not a repeat of the stocks in New York that we have here. The second thing is that because we're an emerging market and some developing countries are doing pretty well, and they are particularly attractive now for foreign investors. We have quite a lot of interest being shown in the market?
Are there any sectors that have been performing particularly strongly recently?
Right now the economy has been going through a major adjustment, so I would say that most of the companies are not performing as they used to do in terms of sectors. Whereas in the financial sectors we had good performance the last years, it's very mixed now. You'll find some in the financial sector performing extremely well and some are not doing well - the same with the manufacturing sector. So I could not say one sector is performing very well, but some companies are performing very well.
How greatly influenced are you by activities in the US market, if it all?
The economy is affected to a certain extent because we are tied to the US dollar. In that respect, yes, the US economy's recovery has had an affect on us in the opposite direction. Overall it affects the economy which naturally has an indirect effect on the market.
What do you think the impact on your stock exchange will be of the increasing globalisation of capital markets?
We are going to attract some sort of investors, because once the global economy is established, once people have got into the habit of investing globally, we will benefit from it. We are now putting in our central depository system and hopefully the mechanised settlement system and electronic trading, and once we have them we're ready for the bigger world. Basically I think that's what it holding us back, because we have some very attractive companies in Jamaica.
So can technology make your stock market more attractive to foreign investors?
Yes. And of course this has the potential of being linked throughout the Carribean and Latin America. So we can within the region operate almost one market, when the time comes. We would be able to trade on all the exchanges, and get information. The major hindrance to the development of our markets in this region is the lack of settlement on time, security of the settlement process. Once that is in place and people of confident then there will be a lot of money coming into the area.
Are there any incentives to get investment coming directly to your brokers?
There are no incentives, because we are dealing with different stocks. The larger international broker may come to us as an agent for a client, but it's a different market and we're dealing with different things. You can go to a well-known international broker and ask them to buy securities in Jamaica, but they will have to deal with another broker. Clients may prefer that because they are comforable with the well-known international company.
What plans are there for any privatisations in Jamaica?
We have a lot of plans for privatisation, but the market is not in a receptive mood right now.There are a lots of issues on the horizon awaiting for the recovery of the economy, and the interest in the equity market. Nothing is happening right now, but there are a lot of plans without a doubt.
Will foreign investment play a part in those plans?
Yes. Right now the Jamaica Railway Corporation is looking into this issue, and I would think a foreign partner would be the ideal thing for them.
Do you believe the market is sufficiently well-regulated at the moment?
I think so, because the stock exchange has been very strong on regulations in the past simply because we did not have a securities legislation until 1993, and the stock exchange has existed for 25 years. They had to put in massive regulations on the brokers and the markets. The result is we now have a Securities legislation that has taken away a lot of the responsibilities from us, but we have been brought up on very strict regulations.
Does that give Jamaica a competitive edge?
Yes, I think so. That's one of the first things investors ask about. They ask what about your securities legislation, and what about your settlement process. We have the securities legislation in place now, we have a very strongly regulated exchange, and we are now sorting the settlement side out too.
Would you agree that the double taxation of dividends is a problem with the Jamaican market?
I don't think so. Dividends pay a very small role in Jamaica. Frankly if they were to do anything about these incentives in terms of dividends I would rather they gave the companies incentives to encourage them to expand more. That's how I see a tax incentive, I do not see that double taxation has had any negative effect on the market.