RND Holdings, the cinema, health and leisure operator, on Friday delisted its shares from the Bahamas International Securities Exchange (BISX) and moved them back to the over-the-counter (OTC) market, reducing the number of listings on the nation's stock market to 16.
The Tribune understands that RND's management decided to switch the shares from BISX because they believed the market was undervaluing the stock by more than 50 per cent, and were coming under pressure from shareholders who have seen the value of their investments fall since the company listed on the exchange in February 2001.
It is understood -that management believes the share price that reflects the company's true material book value should be around $1, as opposed to $0.59 closing price the stock enjoyed at the end of its last day on BISX on Friday.
An analysis of share price performance on BISX, carried in the Fidelity Group of companies' July 2002 newsletter, rated RND, as the Worst performing stock over the previous 24-months, with its share price declining by 82.80 per cent. The stock was also the poorest. performer over previous 12 and six month periods, experiencing declines 37.89 per cent and 24.36 per cent respectively.
The Tribune understands that RND's management believes that removing the shares to the over-the-counter market, where brokers, act as market makers and provide liquidity, buying and selling shares, will help provide the stock with a truer value.
However, market sources told TheTribune last night that the switch was not likely to provide any significant boost to RND's share price, at least in the short term.
Stocks on the over-the-counter market trade on fundamentals, such as a company's earnings performance and outlook, and RND has been losing market share in its core cinema business to Galleria, has experienced competitive pressures in its Gold's Gym franchise with the opening of Doctors Hospital Health Systems' Bally Total Fitness complex and has much of its assets tied up in low yielding real estate.
In its 2001 annual report RND admitted it believed there was now 'minimal growth" opportunities available in the Bahamian market and had begun "to explore other means by which to grow profits which will not only be limited to the expansion of existing businesses in the Caribbean, but also evaluating new business opportunities within The Bahamas.
RND's withdrawal from BISX may also be linked to the fact that the exchange has failed to meet the expectations of listed companies, most of whom have seen their share prices decline since listing on the trading platform.
