Sunday, April 21, 2024

Answer: regional stock exchange

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MASSY HOLDINGS LIMITED’s (MHL) decision to delist its shares from the Barbados Stock Exchange (BSE) should come as no surprise to the BSE and Barbadian shareholders of MHL.

MHL has given the following reasons for their decision to delist: the low level of trading of MHL’s shares on the BSE, the costs associated with the cross-listing of the shares, the absence of harmonisation of securities laws and regulations, the stock exchange rules in the CARICOM Community, and the price differential between the exchanges in Barbados and Trinidad & Tobago.

There are currently 16 local companies listed on the BSE and four regional companies cross-listed – Jamaica Money Market Brokers Ltd, MHL, One Caribbean Media and Trinidad Cement Limited. The departure of MHL will leave three cross-listed entities and therefore reduce the total listings on the BSE from 20 to 19.

Remember that local companies such as the Barbados Dairy Industries Limited, and the former Barbados Shipping & Trading Limited – acquired by MHL in February 2008 and now named Massy Barbados – some years back had also cited costs as a reason for delisting or wanting to delist.

So what does this mean for Barbadians who currently own shares in MHL? As is pointed out in the circular from MHL, Barbadian shareholders will have to request 1. a transfer of their shareholding from the Barbados Central Securities Depository (BCSD) to the Trinidad & Tobago Central Depository or 2. request a physical share certificate presumably from MHL’s corporate secretary via the BCSD.

And what does this mean for Barbadians who wish to purchase or sell shares in MHL? No longer will Barbadians be able to contact their Barbadian brokers and have their purchase or sale transactions done locally. Barbadians will now have to engage a broker in Trinidad & Tobago or engage a broker in Barbados who will then have to engage a broker in Trinidad & Tobago to make the transaction.

In essence, MHL will save costs in not cross-listing its shares on the BSE but Barbadians wishing to purchase or sell shares in MHL might incur additional costs and some frustration as a result of this decision by MHL. How can the reasons given by ML for delisting be resolved? There is need for a regional stock exchange – the sooner the better!

Douglas Skeete is a chartered accountant and interim president of the Barbados Association of Corporate shareholders.

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