by Marlon Madden
Barbadians are being encouraged to take advantage of investment opportunities on the stock markets in Jamaica and Trinidad and Tobago, where trading is more vibrant.
Delivering the second quarterly CARICOM Investment Report for this year, Professor Justin Robinson, Director of the Sagicor Cave Hill School of Business and Management, expressed disappointment that individuals in Barbados and other Eastern Caribbean islands were not engaging in more cross border trade on regional stock exchanges.
“One of the key points I really want to get out this programme is to really let people across the region know that there are opportunities to place your money within our region and earn quite solid returns, and remind you these are returns in US dollars,” said Robinson.
The CARICOM Investment Report on the region’s six stock exchanges, forms part of the thrust of the Cave Hill School of Business to zoom in on private sector investment and performance in the region, and encourage greater buying and selling of shares.
Robinson said he believed greater awareness among residents about the opportunities across the region could serve as a catalyst in removing the regulatory and other barriers that affect people’s ability to move money across the region.
“If the Jamaican investors had easy access to the Barbados, the Eastern Caribbean or Trinidad stock exchanges, we might very well see some life breathed into those markets.
Investors who are sitting on the sidelines in Barbados and the EC are very limited in opportunities on their own exchanges – where the stock prices doesn’t move – if they had access to the Trinidad market or the Jamaica market then we are expanding their universe of possible investment,” he explained.
During the review period of April 1 to June 30, 2021, a collective 1.4 billion shares were traded on the Barbados, Bahamas, EC, Guyana, Jamaica and Trinidad and Tobago stock exchanges, compared to the 1.23 billion shares traded in the first quarter.
A total of 211 companies are covered in the report – 125 listed in Jamaica, 24 in Trinidad, 27 in Bahamas, 13 on the EC Stock Exchange, 13 in Guyana and nine in Barbados.
Seventy-four or 34.5 per cent of the stocks posted gains, 104 or 49.7 per cent declined and 31 or 15.5 per cent were unchanged.
During the quarter, the five most traded stocks were all out of Jamaica, which saw a cumulative total of more than 48,429,510 shares changing hands. Four of the five biggest declines also came out of Jamaica. The other is out of Trinidad & Tobago.
As at June 30, 2021, the market value of the investments on the stock exchanges was US$33.3 billion.
Robinson pointed out that while the regional stock market struggled in the first three months of the year even as international stock markets rebound, the second quarter saw regional stocks experiencing “some pick-up” in activity.
“It seems as if investors are really figuring out where to invest their money [and] what is correct pricing in this COVID environment,” he said.
However, Robinson pointed out that one of the difficulties in not having more Barbadians investing in companies listed on the Jamaica or Trinidad stock exchange is lack of ease in doing business.
He said several policies have been developed at the level of CARICOM to address those and other challenges, but suggested that policymakers in each territory were being too lax in their approach.
“These are regulations that our policymakers, politicians, only they can give that regulatory certainty and that regulatory ease, and we know the ease of doing business is difficult in each country individually and then when you try to do cross border business then it just gets multiplied by each country you try to do business in,” he said.
He also called on stockbrokers and investment firms to do more to educate the public on this type of investment in Barbados and other regional economies.
“What we don’t have outside of Jamaica really are financial intermediaries that get up every day and it is their business to try and sell these products to investors,” he said.
In his investment tip, Robinson zeroed in on the question of when to sell a stock. Stating that this was a difficult decision to make, he said there were several factors that should indicate when would be the best time to sell.
“A good sell signal is if there is a change in the company’s fundamentals. As an investor you bought the stock because of the company’s fundamentals and its business plan.
But if something has changed fundamentally in the company – the top management might be quitting or forced out . . . maybe their pipeline of new product is drying up or there is some fundamental shift in technology “The central point is that when something changes, the investor has to reexamine whether or not it is the same company he or she bought. If it is not the same company, then it might be the right time to sell,” he explained.