Economist encourages listing on stock exchange

TRINIDADIAN ECONOMIST Professor Patrick Watson has suggested that more CARICOM companies list on their local stock exchanges to encourage cross-border equity flows.Speaking at The Mount Restaurant, University of the West Indies (UWI) Cave Hill campus, during a breakfast session hosted by UWI and FirstCaribbean International Bank, he said this applied to all CARICOM stock markets, which he described as “relatively poorly developed”.He was presenting the findings of a study on CARICOM Cross-border Equity Flows which he and economics and finance graduate Preeya Mohan conducted.Watson, a director of the Sir Arthur Lewis Institute of Social & Economic studies at UWI’s St Augustine campus, said both previous literature and his study show that cross-border flows increase with increasing market capitalisation.Lower feesCurrently, there are 13 cross-listed CARICOM firms, the majority of which are listed on only two exchanges.To increase this number, Watson suggested that lower listing fees may be required.“This would have the effect of encouraging cross-listings and more [foreign direct investment] activity in the form of mergers and acquisitions. It may also require interventions at the level of families who own most of the business that may be listed,” his study says.The professor also recommended that special efforts be made to develop the less active exchanges in Suriname, Haiti, Guyana and Belize.This, he said, should include the introduction of electronic trading platforms since it has been shown that cross-border activity in the region is favoured when the exchanges are at a similar level of sophistication. (NB)