Trouble for the stock market

CONTINUED DELISTING of companies from the Barbados Stock Exchange (BSE) and inactive trading could spell trouble for the local stock market.And chairman of the Securities Commission Sir Neville Nicholls said that Government might have to offer tax incentives to investors to encourage trading, and to companies to list on the BSE and raise capital there.“The individual national markets are really very small markets and, inevitably, what is emerging is the need for one regional market,” Sir Neville told BARBADOS BUSINESS AUTHORITY.Speaking on the pending Barbados Dairy Industries Ltd delisting, the Securities Commission chairman said there was very little activity in terms of buying and selling shares.“There is not yet a culture of investors buying and selling shares in an active manner similar to what obtains in developed markets, and so, more and more listed companies are going to question the need or desirability or the effectiveness of being listed if it is not impacting on the market value of their shares,” he pointed out.According to the attorney-at-law, established companies found borrowing from commercial banks easier than “going through the process and procedures required to raise capital on the stock market by issuing shares”.What’s more, Sir Neville said it was not for regulators like the Securities Commission to take a lead role in the establishment of a regional stock exchange.“The role of the regulators is to approve the arrangements that are agreed on by the various stock exchanges; Government has a supportive and facilitating role . . . but it is not something that the regulators can enforce. We cannot take a lead role. It is for the national stock exchanges to take the lead in this,” he contended. Taken from this week’s Barbados Business Authority