The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas International Securities Exchange (BISX) is “ahead of schedule” following three consecutive years of profitability, its chief executive saying it had successfully ‘changed the conversation’ from survival to growth.

Keith Davies told Tribune Business that by achieving financial sustainability from 2012 onwards, the exchange’s management could now focus on expanding the market as opposed to limiting budgets and restraining expenditure.

He disclosed that BISX was now concentrating on upgrades designed to make its website the “one-stop shop” for all Bahamian capital markets information, and the creation of a ‘secondary market’ for small and mediums-sized issuers.

Expressing hope that the latter initiative would be kick-started by tomorrow’s ‘Future Issuers Conclave’, at which BISX and its broker/dealer members will engage with 30-40 private companies, Mr Davies said plans laid more than a decade ago were starting to bear fruit.

“We’re at the stage I planned 10 years ago,” he said. “We set a course, set a plan to remove BISX from its debt position to a position of profitability, but it had to take the time we put into it, and it had to take the time it took.”

Launched in mid-2000, BISX’s future had become precarious by 2002-2003, after expected business volumes failed to materialise, causing its ‘ramped up’ expense base to plunge the exchange into heavy losses.

It was rescued by what amounted to a ‘bail out’ from a combination of the Government/Central Bank, in conjunction with existing and new private sector investors, yet it took another nine years before BISX made it ‘into the black’.

“We’re a little ahead of schedule,” Mr Davies told Tribune Business. “This is probably our third year [of profitability], 2012, 2013 and 2014, and we will be coming into our fourth year.

“Now the discussion is what else are we going to do, and how are we going to expand the market. The discussion has changed from BISX to the market.”

Yet he quickly added: “We’re on a solid footing, but I’m never satisfied. I’m still concerned with our spending; we keep a tight control on it and invest wisely. The only way you can make money in this game is to do things right.”

Looking to the future, Mr Davies said: “Our next initiative moving into the end of the year is the upgrading of our website, which we’re actively engaged in.

“It’s in train, and we’ve identified the things we want to do. We want to establish a website that will be useful to investors, companies and high school and college students for studies and research.

“We want this to be the one-stop shop for the capital markets. We haven’t upgraded it for 10 years. Now is the time.”

Mr Davies expressed hope that tomorrow’s ‘Conclave’ would stimulate interest among participants in BISX’s long-planned secondary listings facility, which is targeted and small and medium-sized companies with less than $1 million in capitalisation.

“One of the things we’re looking at with these companies is the potential to access the secondary market; the smaller market,” the BISX chief executive told Tribune Business.

“The features and opportunities of it, and how it’s going to work without costing them the huge fees and expenses that come along with it.

“This is something that is going to play off that [Conclave], and help us develop that even further.”

BISX’s proposed ‘secondary market’ is designed to give smaller companies ‘a taste’ of the capital markets, introducing them to what is required - and what it means - to be a listed, public company.

They can use the exchange as a platform from which to raise working capital/finances, while also enjoying ‘lighter touch’ regulation and lower fees compared to those companies listed on BISX’s ‘Main Board’ or primary listings tier.

“The only thing the exchange can do is create the environment, create the playing field that is open, transparent and fair,” Mr Davies told Tribune Business. “After that, it’s up to the investors coming into the market to do something.”