The Bahamas International Securities Exchange (BISX) is undergoing drastic changes, but top officials are refusing to disclose exactly what the transition entails.
Chairman Ian Fair confirmed to the Bahama Journal that key changes are being made at BISX, the capital markets that some had claimed was teetering on the verge of collapse.
There are unconfirmed reports of a possible downsizing exercise at BISX, but Mr. Fair declined to address those speculations.
He did lay to rest claims that the exchange was being shut down.
“I know of lots of what is going on but I am not at this point willing to disclose it publicly to the press, but we are not closing our doors,” Mr. Fair said. “We are obviously, as any company, looking at our various options and considering what we have to do and we are going about business in a normal manner.”
Inside sources claimed that the exchange had reportedly been downsized to a skeleton staff of two workers and negotiations were being made with at least one business to take over much of the space that BISX had rented in the British Colonial Hilton Hotel.
BISX has been forced to take key cost cutting measures because of limited funding, another source claimed.
“It seems that Bahamians are just not that knowledgeable about trading and investing and many persons probably do not want to take the risk,” the source said.
The exchange’s woes are no secret. BISX had asked the former Free National Movement Government to match a $2 million injection from investors, but the request had gone unfulfilled.
Under the current Progressive Liberal Party administration, the Central Bank of the Bahamas has vowed to give it $150,000. The Minister of State in the Ministry of Finance James Smith has acknowledged that BISX needs a lot of help to take it off “life support.”
He believes that the government is ready to act more forcefully on the BISX matter because an exchange is important to the growth and development of the local economy.
What was needed, he admitted was a refocusing of the exchange’s business plans.
During the second half of 2001 and throughout 2002, efforts were undertaken by the board of directors to reduce costs and certain shareholders of BISX provided financing to avoid closure.
The Central Bank had commissioned a study carried out by foreign consultants earlier last year to look into the beleaguered exchange and identify public policy measures which would be necessary to enable BISX to become viable.
The study found that BISX was viable and should receive some kind of financial assistance to prop it up and keep it from an early demise.
Central Bank Governor Julian Francis believes that any modern economy needs a securities exchange.
“What it does really in a very basic way is it is a vehicle by which the savings of the general public can be transferred in the hands of the business people who are actually the ones who drive the economy,” Mr. Francis said.
“The Government of the Bahamas has been, and is of the view that the development of domestic capital markets is a vital component of the country’s broad economic development effort,” Minister Smith explained.
Financial experts, capital markets participants and public officials are expected to report on BISX to the State Minister for Finance by April.
The Bahama Journal
