Last Updated on Thursday, 1 February 2024, 17:30 by Written By Denis Chabrol
Vice President Bharrat Jagdeo on Thursday said government would be willing to fund improvements to the privately-owned Guyana Stock Exchange (GSE), even as he flayed the administration for being saddled with the same more than 2o-year old computerised system since its inception.
“We are prepared to modernise this but it is not owned by the Government of Guyana. It’s a private exchange and so lamenting the fact we not giving them money, all kinds of stuff, The government is supplementing the exchange and is prepared to give more to probably modernise,” he said.
Mr Jagdeo acknowledged the important role of the stock exchange in raising financing and was ready to work with the private sector to improve that secondary market. “Given that we want to have this happen, we’re prepared to work with the stock exchange and the private sector and everyone else to modernise it and if it requires money we will put in the resources too,” he added.
Already, the GSE receives an annual subvention of tens of millions of dollars which its Chairman, Attorney-at-Law Nikhil Ramkarran said is used for mostly rent and electricity. Mr Ramkarran’s remark about the GSE still operating a 20-year old computer system and could not afford to buy modern trading software did not go down well with the Vice President. “If you got an old computer, buy yourself a new computer. A low-income family now can afford a computer. You’re lamenting that ‘we got a 22-year old computer,” Mr Jagdeo said. The software for trading of shares is valued hundreds of thousands of United States dollars.
Mr Jagdeo said public companies do not want to be listed on the GSE because of enhanced scrutiny and regular publishing of the accounts. “Even now, the public companies are not listed on the exchange because when you list on the exchange, there is a greater level of scrutiny over your accounts when you list on the exchange,” he said.
The public companies, which are privately-owned, are Banks DIH Limited, Caribbean Containers, Citizens Bank, Demerara Bank , Demerara Distillers Limited, Demerara Tobacco Company, Guyana Bank for Trade and Industry Limited, Guyana Stock Feeds Inc; J.P. Santos and Company Limited, Property Holdings Inc; Republic Bank Guyana Limited, Rupununi Development Company Limited, and Sterling Products Limited. He said the GSE should ask existing companies to list on the exchange.
Mr Jagdeo said most of them are owned by a single individual or a single company, resulting in them operating more like private companies. He opined that if the companies were listed on the GSE, the shares would be “more reflective of your fundamentals” such as growth, increased profits and higher price earning ratio, share prices would increase because they become attractive.
The GSE Chairman is on record as ruling out that secondary market putting in place an odd-lot system to prevent the sale of less than 1,000 shares affecting the overall share price unless Banks DIH Limited becomes a listed company. He said over the past 19 years several meetings had been held with successive Finance Ministers from both parties in government as well as with other officials to bring about improvements but to no avail.
