Rotarians were yesterday educated on capital markets in the Bahamas with a senior member of the financial services sector providing an overview of the recommendations submitted to the government months ago by the Bahamas Stock Exchange Committee.
Some of the recommendations call for the relaxation of exchange controls, which would pave the way for Bahamians to buy high-grade foreign securities, and allow well-established foreign companies that have been operating in the Bahamas for a number of years to invest in Bahamian Dollar Securities.
The committee, which included a number of top financial experts, has seen at least one of its recommendations come to light. ﾠBahamians were recently given the opportunity to buy foreign stock, through Kerzner Internationalﾴs stock offering.
According to President and Chief Executive Officer (CEO) of Fidelity Capital Markets Limited, Michael Anderson, in a bid to improve liquidity in the market, the Stock Exchange Committee suggested that non-residents and foreign corporate citizens be allowed to own Bahamian Dollar Securities.
ﾓPrincipally, the recommendations didnﾴt really relate to people in the States, or overseas generally, it related to foreign people, like myself, living in the Bahamas for a long period of time, who they said should be able to invest,ﾒ said Mr. Anderson, who was speaking during a Rotary Club of West Nassau luncheon at the Buena Vista Restaurant on Thursday
ﾓIt also related to insurance companies like Imperial and British American who up until now are still unable to invest in securities despite the fact that British American has been here 85 years and Imperial has been here over 100 years, they are still unable to invest. These recommendations were all made to bring about liquidity.ﾒ
Mr. Anderson pointed out that Bahamians cannot invest in foreign assets without Central Bank approval, and if they want the bankﾴs approval they have to pay a 25 percent premium.
Mr. Anderson has lived in the Bahamas for the past 12 years, and was a member of the committee, which determined that the Bahamas International Securities Exchange was indeed viable.
Other recommendations included provisions to allow for regional cross border listings, reform in the private pension sector, the listing of government securities on BISX, the need for credit rating facilities and National Insurance Board (NIB) market participation.
Mr. Anderson said, ﾓA major issue is that we have been speaking to the government to get National Insurance some equity. Itﾴs the biggest source of savings here in the island, and it really ought to be used to a great extent to build the capital markets.ﾒ
Rogan M. Smith, The Bahama Journal
