A Perspective from a former Stock Exchange Regulator: Insight on Guyana Stock Exchange’s Challenges

Last Updated on Sunday, 4 February 2024, 8:49 by Denis Chabrol

By Theon Alleyne

Recent events surrounding the Guyana Stock Exchange (GSE) have raised eyebrows, and rightly so. As a former regulator with a significant tenure in listing and trade regulation, the dilemma of the GSE must be addressed with a sense of urgency. The dramatic fall in Banks DIH’s stock price, from $180GYD to $160GYD on the sale of just 5 out of 895 million shares, initially appeared to be an abnormal market fluctuation.

Interestingly, Banks DIH’s stock price further declined a week later to $155GYD. This further decline occurred one week before the last annual meeting where the company reported successful financial results. This development raised the Company’s ire. However, it was soon evident that these were not typical trades of listed securities, but rather transactions in a less-regulated Over-the-Counter (OTC) market.

In my regulatory career, which included overseeing public company investigations, I learned the critical importance of liquidity and market integrity. The deep discount sale in the OTC market, although not unusual, raises questions in this case because of concerns about corporate governance adherence, especially considering the company’s suggestion that odd-lot sales are prohibited.

A deeper issue at the GSE is the absence of genuine listed issuers, an anomaly for a stock exchange. The GSE’s website, with its ticker-tape and trade reports, paints a picture of listed entities subject to robust governance and compliance, which, in reality, is misleading. This misalignment calls for an immediate and transformative approach to align the GSE with global best practices.

Guyana’s burgeoning economy, increasingly in the global spotlight, presents a golden opportunity for the GSE to evolve into a significant player in the capital market, paving the way for diversified economic growth and business ownership among citizens. Drawing on my experiences with major stock exchanges and global market trends, I advocate for GSE’s adaptation of a multi-tiered market system, learning from the models in the UK, USA, and Jamaica.

The GSE needs to be re-envisioned as a national asset, crucial for nurturing a thriving business environment in Guyana.

Despite the hesitancy of established businesses to list on the GSE, emerging enterprises recognize its potential. Maintaining its majority Guyanese ownership and control is key to ensuring that the GSE serves the Nation’s interests effectively.

The GSE stands at a crossroads. My experience informs me that there is a clear path to elevate the GSE to a listing and trading venue that genuinely contributes to Guyana’s economic and entrepreneurial landscape. It is time for the governmental and private sector business service organization to step up and support this transformation.