THE ONLY WAY to increase the number of listings on the Barbados Stock Exchange (BSE) is to first understand why companies choose not to list, says Dr Justin Robinson, head of the Department of Management Studies at the Cave Hill Campus of the University of the West Indies.
Speaking during a panel discussion entitled Trading Places: Where Are The Regional Stock Exchanges Heading? last Wednesday, he noted that while a lot of focus tends to be placed on the BSE, it “is really only a facilitator of organizations in the country”.
“I don’t think we can get to the bottom of this problem until we understand the choices that companies and organizations are making,” he said.
Speaking at the Grand Salle of the Tom Adams Financial Centre, Robinson queried why some listed companies chose to hold on to 80 per cent of their shares when “you can dominate and control a company with 40 per cent”.
The university lecturer noted, however, that “you don’t need to have a big, active stock market to be a successful country”.
“It depends on your underlying economy. If your companies are doing relatively safe traditional business activities, why go through the hassle of an exchange?” he asked.
Robinson also said there was a lack of available information.
“Internationally people are used to having respected financial houses give you a recommendation that you should buy this stock, sell this stock, hold this stock. If you don’t have information like that in the market, then people don’t have a push toreallocate their portfolio,” he said.