Trinidad and Tobago
Peter Clarke, Chairman of the islands' stock exchange, outlines the role they are set to play in the global market
Why go to a Caribbean Stock Exchange when you could go to New York or London?
None of our companies are currently listed on a major stock exchange. So if an investor wishes to participate in the growth of the Trinidad and Tobago economy, which is expected to expand by five per cent over the next three years, they have to do so through our exchange.
Are there any sectors that have been performing strongly recently, and why are any strong sectors performing well?
With the current strength of the economy, the banking, construction, manufacturing and conglomerate sectors have all been performing well.
How greatly influenced are you by activities in the large US markets?
Our market is barely influenced by the large US markets. In 1995 when many Latin markets declined due to the tequila effect, our market rose by 70 per cent, making it the second best performing emerging market.
What will be the impact on your stock exchange of increasing globalisation of the capital markets?
We expect it to be very favourable as our market becomes better known and more easily accessible to foreign investors.
What incentives are there for foreign investors to place investments through your brokers instead of going through larger international exchanges?
As I mentioned before, our companies have to be accessed through our brokers. We welcome and encourage foreign investors to join with our substantial pool of domestic capital and participate in our exchange.
Are there any incentives regarding taxation and regulation for foreign investors?
There are double taxation agreements with the United States, Canada, Britain and many other countries.
Does NAFTA have any relevance to Trinidad and Tobago?
Trinidad and Tobago is anxious to join NAFTA and gain market access for our goods and services in both North and South America.
What plans are there for any future privatisations? Will foreign investment play a part in any privatisation and, if so, how much of one?
Many state enterprises have been privatised over the past several years. However, the Government's approach in many cases was a direct sale to, or joint venture arrangement with a multinational company in the particular industry. The telecommunications monopoly TSTT which is 49 per cent owned by Cable and Wireless is currently being examined for privatisation and it is expected that foreign investors will play a part.
How is the stock market regulated ? What powers does any supervisory body have, and do you think greater regulation is necessary ?
On 25 April 1997, a new Securities Industry Act came into force. It established a Securities and Exchange Commission whose objective includes ensuring full and fair disclosure of every aspect of securities transactions. The SEC is expected to promote investor confidence through surveillance over the market to ensure the maintenance of a fair and open capital market.
Is new technology going to have any impact on your stock exchange ? If so, in what way ?
Our Stock Exchange, along with those of Jamaica and Barbados, has recently entered into a contract with EFA Software Services of Canada to establish a Central Securities Depository and automated trading system that will greatly enhance our clearing, trading and settlement system.