2015 turned out to be a landmark year for the burgeoning Jamaican Stok Exchange (JSE), following a recent report from global financial analyst Bloomberg News showing the JSE had the best performance of the year, among 92 markets tracked by Bloomberg.
On the JSE, some US$700,000 a day in securities were traded in the first 11 months of the year, an increase of almost 40 percent from 2014. The recent boost owes much credit changed regulations, including opening accessibility to the exchange for foreign-based investors.
South Floridian investors took full advantage of the growing market, according to local accountant Learie Mulling of Broward firm Crichton and Mullings. A key positive decision by the government, says Mullings, “gave special incentives like a 5-year tax free break to junior companies to trade and attract capital on the stock market.” And to facilitate overseas investors, including those in the Jamaican Diaspora, in May 2015, the JSE implemented an online trading platform.
“The attraction and strength of the JSE is the direct result of the IMF measures, and the tenacity of the Jamaican government to ensure it’s large debt liabilities were rolled back,” said Mullings. “It was the IMF and the government’s objective to encourage equity investment, with investors purchasing shares in companies, as the alternative to companies and investors accumulating debt by loan financing. The austerity measures have created cash surpluses in the Jamaican economy and this cash has been invested in the stock market.”
But Mullings notes that “there’s still a far way to go, but for investors, and the general Jamaican public, there’s now a foundation in Jamaica on which to build a very strong economy.”
Jamaica has successfully passed ten of the economic performance tests with the IMF, and is poised to pass the eleventh. The nation has recorded positive economic growth for the third straight year, reaching 1.4 percent in 2015, even as the government continue to unload the massive debt burden.
Miami investment analyst Godfrey Comrie said the positive report on the JSE isn’t surprising, as in recent years Jamaica has developed a collection of publicly traded companies with strong earnings. “In Jamaica, investors should find it more exciting to trade money in solid companies listed on the stock exchange than depend on banks to render fixed rates of return.”
Economist Sean Barnaby says he expects the JSE to continue its buoyancy in 2016. “Interest rates remain low, making the stock market the most viable option to investors. With investment capital pouring into Jamaica, this should also stabilize the exchange rate.”