The value creation in the new Jamaica Stock Exchange Private placement market is significant, said Steven Gooden, immediate past president of the Jamaica Security Dealers Association.
Gooden, speaking at the Jamaica Stock Exchange Investment and Capital Markets Conference, outlined that the latest data from the Financial Services Commission shows the number of exempt distribution transactions closed totalled 331 valuing approximately US$3.3 billion.
The value relates to the period January 2018 and October 2020. Gooden, the CEO of NCB Capital Markets, said based on private placement data, “the value creation potential of this platform [JSE] is huge.”
“The importance of the capital markets is greater now than ever before given the type of flexibility that the market affords…and the need to beef up capital.”Steve Gooden, CEO of NCB Capital Markets
He said, “Imagine the secondary market opportunity that now exists for these and new issues that opt to trade on the platform.
“In addition to greater liquidity, visibility and price discovery for placements, the platform should result in a swell in the investor base, as institutional investors will be in a better position to navigate liquidity considerations imposed by internal investment policies statements and/or regulations.”
Gooden said with COVID affecting all sectors, each one has a role to play including the capital markets.
“The cash flows and capital of many businesses have been dramatically impacted as the pandemic has cost lives and disrupted livelihoods on an unimaginable scale.
“As countries begin to slowly reopen their economies and societies, the effects of the crisis will linger. Government’s financing needs are rising dramatically for both the short and medium term, first to tackle the health emergency and then to start working toward a sustainable recovery. Many developing countries rely heavily on revenue sources such as remittances, commodity exports, and tourism and are likely to be disproportionately affected by the global recession.”
He continued, “With the above realities, the importance of the capital markets is greater now than ever before given the type of flexibility that the market affords within the context of shifting cash flows and the need, in many instances, to beef up capital.”
The markets will help in diffusing stresses on the traditional banking system, that has more rigid credit solutions, by better matching risk with risk appetite in the non-banking space, he said.