The Jamaica Stock Exchange has promised greater strengthening of rules relating to transparency as well as an expansion of internal and external audit functions as part of expanded business plans. So said the JSE’s General Manager, Mrs. Marlene Street in her presentation to the post-annual general meeting press conference yesterday (June 23, 2005).
In presenting her outlook for 2005, Mrs. Street said that during the previous year, the JSE had continued to review and where necessary made changes to the Rules and internal management processes.
“We strengthened our market operations and trading oversight and through many outreach programmes, encouraged more companies to list and more persons to invest in the stock market”.
She said that, among the deliverables for 2005 were: more outreach activities in respect of training in the market; a refinement of the company’s internal structure to create greater responsiveness to customers as well as a strategic review of the Exchange’s Business Model to ensure the generation of revenues from multiple revenue streams.
Executive Chairman, Mr. Roy Johnson, outlined the company’s decision to become a de-mutualised company within twelve months. He reported that early this year, at an Extraordinary General Meeting, the company had adopted a new Memorandum and Articles of Association. This effected the following: The company is now a public company with increased share capital; the company is now a “for profit” enterprise and in keeping with the Articles of Association, the Council of the Exchange has been renamed a Board of Directors. Shares will also be issued to members in exchange for their seats on the Exchange.
He said that with demutualization the Board will have at least 50% of its members being non-brokers; a new market regulation structure will be put in place to avoid conflict of interest; no entity or group will be allowed to own more than 10% of the shares of the Exchange and the JSE will become a public listed company.
Mr. Johnson reported that the JSE had surpassed its 2003 financial performance. He said that operating revenues were $123 million, exceeding the previous year’s $92.2 million by $30.8 million, that is a 33.4% increase.
He also noted that the Jamaica Central Securities Depository (JCSD) a subsidiary of the JSE, had contributed a surplus of $28 million in 2004, compared to a loss of $2.3 million in 2003. Consolidated net surplus after tax was $109 million, a 41% increase above the $77.3 million reported for 2003.
“We feel confident that both the JSE and the JCSD will continue to be strong, financially viable entities and with the new thrust as a “for profit” company, we will seek to offer new services to expand revenues upstream,” Mr. Johnson said.
The Executive Chairman recalled the Prime Minister’s announcement of government’s intention to create a new investment vehicle which would select state-owned and private sector companies to be offered to the general public.
He said that the JSE intended to keep the issue alive as “we are convinced that some of the government entities, which were privately divested could have found support from the market and in their hour of greater capital need, taxpayers could have been spared”.
He pointed out that the JSE had, for its part employed a consultant around which a business development unit would be developed to attract new companies to the Exchange.
