Creating wealth by investing in the local stock market

Managing director of the Jamaica Stock Exchange (JSE), Marlene Street Forrest, is encouraging people to create wealth by taking advantage of lucrative opportunities that are present in the local equities market.

According to Street Forrest, Jamaica’s business environment is transparent, well regulated and friendly to businesses and persons that are interested in investing.

“The real beauty about the stock market is the fact that you can diversify your portfolio within different areas of the economy. We have the main market that looks at more mature companies listed giving you an opportunity to invest in ordinary share or preference shares. We have the junior market that looks at growth stocks and they’re doing well despite the pandemic,” she said at the JSE’s Investing in Jamaica virtual forum last week, which was held in partnership with Jamaica’s Consul General in New York Alsion Roach Wilson.

The Investing in Jamaica virtual forum, which started in 2019, is aimed at providing members of the Diaspora with the necessary tools for building their finances through sound financial strategies.

“We also have the US dollar market and the bond market and just recently we added the private market. Therefore, the investment horizon and environment is right. We have educated, learned, willing and able brokers to take you through the paces,” she continued.

However, she highlighted questions that one should ask before investing.

“Will it create a store of value overtime? Will it increase ahead of inflation? Will there be various income streams? Can I know what the value of those are? Is my investment safe? These are some of the questions that need to be answered, and when you do that then you’re ready to look on the channels of investments,” she advised.

Street Forrest said that over the last 10 years, the percentage of investors in the local equities market has grown from two per cent to 10 per cent.

“That is the beauty of the stock market – that it does not require significant amount of monies to invest. The governance structures within Jamaica are well equipped to deal with issues that may arise, in terms of regulatory matters, there is broad areas of communication at JSE through our website,” she said.

“It’s a win-win situation. By investing in Jamaica we grow the country while you can grow your portfolio and be well on your way for wealth creation”.

JSE Group Business Development Manager Andre Gooden further indicated that between 2020 and 2021, over $45 billion has been raised on the main and junior markets.

“Right now we’re still at $1.6 trillion in terms of market capitalisation. So far this year, the market index has increased by 0.5 per cent and there are and remain opportunities for growth. The market still remains liquid and quite a few companies are looking to take advantage of that liquidity by raising capital to reorganise their own businesses,” Gooden said.

“We had five new listings in 2020 and we have several other [companies] who had intended to list in 2020 and had put their plans on hold as the COVID-19 pandemic hit, but a lot of those issuers are coming to market in 2021, so stand by. Trying to time the market is never really a good idea and those that do tend to lose a lot more than they gain. This not Las Vegas, you really have to be patient,” Gooden advised.

He added that the JSE has increased market education through its e-Campus platform and strengthened national and regional partnerships.

Looking ahead, Gooden indicated that JSE is in the final stages of rolling out its trading of digital assets service; will later in the year launch its data commercialisation platform – a multifaceted offering which will include a mobile app and the ability to trade securities through said platform; will also launch a 24/7 Caribbean broadcast channel that will feature information on business in Jamaica and the region’s stock exchanges and equity markets and will offer fund management services for fund managers in Jamaica to allow them to focus more on their customer services.