About 800 Jamaican investors, who own 1.5 billion CIBC FirstCaribbean International Bank (FCIB) ordinary shares worth almost $2 billion, will now have to turn to Barbados if they want to trade their stock.
But market watchers are not expecting the move, necessitated by the Jamaican Stock Exchange’s (BSE) delisting of the regional financial institution effective last Friday, to be a major fillip for the Barbados Stock Exchange (BSE).
That’s because the Jamaicans have hardly been trading their shares at home, with $1.29 the last quoted traded price of CIBC FCIB’s shares on the JSE and trading having slumped by 21.5 per cent this year.
In a February 26 notice to shareholders, CIBC FCIB’s chief executive officer Rik Parkhill said after being told by Jamaican authorities that his organisation’s shareholding had fallen below acceptable levels, the JSE was invited to use its discretion and delist the bank.
The bank’s problem was that its minority shareholding fell below the required proportion of not less than 20 per cent of its listed ordinary shares, and the average Total Trade Volume for the 36 month period prior to the JSE notice was below two per cent in breach of rule 402B (i) (b) of the JSE rules.
With the bank having closed its register in Jamaica last Monday and its shares delisted last Friday, it means that Jamaicans will have to “continue to trade their shares through the [BSE]”.
“We wish to assure you that steps will be taken to ensure that none of our shareholders will be placed at a disadvantage as a result of the delisting. Although a shareholder’s shares may be traded on the Barbados Stock Exchange after March 7, 2014, there will be no change to the procedure all shareholders currently follow in order to initiative a trade on the JSE – shareholders should simply approach their licensed stock broker in the usual way,” Parkhill said.
“To facilitate trading of shares on the Barbados Stock Exchange, a shareholder should have ownership of the shares entered in an account in his or her name in the Barbados Central Securities Depository (BCSD) by either. . . instructing a broker to have the shares in that account transferred to an account in the shareholder’s name at the BCSD. . . or. . . if the shareholder currently holds a share certificate for the shares, instructing a broker to open an account in the shareholder’s name with the BCSD for the shares in replacement for the share certificate,” he added.
Parkhill also said CIBC FCIB “has arranged with the JCSD that the JCSD’s fee for any Inter CSD Movement . . . which takes place within one year of the delisting, that is, before March 7, 2015 be charged to, and paid by, the bank.”
The CEO, who is also a CIBC FCIB director, told shareholders the development did not mean it had turned its back on the Jamaican market, having “recently injected US$70 million into is Jamaican subsidiary”.
“This delisting should . . . be viewed strictly in the context of it not being feasible to expect any increase in the proportion of either the minority shareholding or the average Traded Volume taking into account the very large number of shares (1.5 billion) and the size of the Jamaican market,” he said.
