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Clarifying Capital Markets

EDITOR, The Tribune.

The article in the Tribune Business Section of last Friday, September 15, about BISX may have given the impression that I was critical of its management for not making BISX more successful by persuading more companies to list.

That is a distortion of what I said. My principal point was the small number of listed companies, and the meager volume of trading of their shares, was due to many factors far beyond the control of CEO Keith Davies and the rest of his executive team. They have worked hard to bring BISX as far as it has come, and have been notably successful in listing many mutual funds and other collective investment schemes for foreign securities.

But the fact remains that with a total of only 20 ordinary shares listed, many of which rarely trade, BISX is a negligible factor in our economy and is shunned by many investors as well as by companies that might consider “going public”.

The principal reason for this is our overly restrictive exchange control rules on capital markets transactions, which cannot be changed by BISX but only by our Central Bank and Ministry of Finance. These rules inhibit the inward flow of off-shore capital held by both Bahamians and foreigners, and make it difficult or expensive for Bahamians to move any local capital to reputable foreign stock exchanges.

As I said, our citizens can freely sink their savings into web-shop numbers games, but cannot invest in IBM, Walmart, or Apple.

The Central Bank appears obsessed with the fear that relaxing capital controls will immediately bring devaluation of the Bahamian dollar.

This fear has often been debunked in Tribune columns by hard-headed Jamaican businessman John Issa, who has a major stake in The Bahamas through ownership of Superclubs Breezes and points out the energy of securities trading on the Jamaica Stock Exchange, free of exchange control

I do hope my friends at BISX will continue their persuasive efforts with the Central Bank, which is where any decision to relax the rules will lie.

RICHARD COULSON

Nassau,

September 17, 2017.

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