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Deeping the Regional Capital Markets: Investment Options Revisited

Deeping the Regional Capital Markets: Investment Options Revisited. Presented to CAIB 37 th AGM & Conference By TREVOR E BLAKE General Manager ECSE Group 10 November 2010. Overview. Introduction Role of Capital Markets Regional Markets Deepening the Markets Conclusion.

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Deeping the Regional Capital Markets: Investment Options Revisited

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  1. Deeping the Regional Capital Markets: Investment Options Revisited Presented to CAIB 37th AGM & Conference By TREVOR E BLAKE General Manager ECSE Group 10 November 2010

  2. Overview • Introduction • Role of Capital Markets • Regional Markets • Deepening the Markets • Conclusion

  3. Introduction • Banks dominate Financial Sector • Banks necessary, but not sufficient to meet needs of modern economy • Sound banking system AND liquid capital markets drive growth • Liquid stock markets drive growth regardless of state on banking system!

  4. Role of Capital Markets Capital markets developed primarily to for efficient mobilisation and allocation of resources Markets expected to channel financial resources to productive purposes to attract for foreign investment and international savings to reduce the over-dependence on bank financing to encourage ownership of productive assets by small savers to provide investment opportunities

  5. The State of Regional Markets 6 Exchanges/markets in CARICOM Bahamas, Barbados, ECCU, Guyana, Jamaica, Trinidad & Tobago 6 Regulators Fragmentation legal & regulatory framework systems listing rules disclosure standards, etc

  6. Regional Capital Markets

  7. Regional Market with Selected Comparators

  8. The State of Regional Markets low level of activity on ECSE market is narrow and thin strong ‘buy and hold’ culture no effective Institutional Investors underdeveloped Intermediary function small public float narrow product range

  9. Deepening Capital Markets • Regulatory Infrastructure • Legal Framework • Prudential Supervision • Accounting & Auditing Standards • Corporate Governance

  10. Deepening Capital Markets • Market infrastructure • Meeting International Standards • IOSCO; CPSS; WFE • Enhancing Role of Institutional Investors • NIS/SSS; Mutual Funds • Widening Retail Investor Base • Mutual Funds; Investment Clubs • Product Innovation • Repos; Swaps; Securitisation

  11. Deepening Capital Markets • Market infrastructure (Cont’d) • Short Selling & Securities Lending • Expanding Product Range • IPOs; Privatisation • Corporate Debt; RGSM • Enhancing the Intermediary Function • market-making; underwriting

  12. Deepening Capital Markets • Enabling environment/supporting infrastructure • Liberalising Capital Controls • Providing Incentives for Listing • Strenghtening Public Debt Management • Enhancing Financial Literacy • Effective, sustained, comprehensive campaign • ECCU Public Education and Information Program • Integrating the Markets

  13. Conclusion • Regional Capital Markets still developing • Some Progress is being made • Still a long way from delivering real benefits that would impact growth • Achieving benefits of markets require collaboration of all parties • Is market integration necessary?

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