Two days after Banks DIH Limited expressed concern about the operations of the Guyana Stock Exchange, the Georgetown Chamber of Commerce and Industry (GCCI) has joined the call for the local stock exchange to be completely overhauled.
Banks DIH Chairman and Managing Director, Clifford Reis told the company’s shareholders on Saturday that the Stock Exchange in Guyana currently publishes and takes into account all security transactions, thereby creating an anomaly, which results in the last set of trades being the lowest.
“As a result of this practice, a small share transaction can significantly affect the share value of a particular share, as has been the case of our stock exchange for all the trading companies presently. This is a concern, and has been communicated to the Guyana Securities Council,” Reis said as he responded to a question posed by a shareholder during the company’s Annual General Meeting at Thirst Park.
He said the issue was also raised with the Guyana Stock Exchange on numerous occasions, but despite the company putting forward a workable solution, it has not been favourably considered by the Guyana Stock Exchange or the Guyana Securities Council.
“Notwithstanding that my fellow shareholders, we have examined the Stock Exchange Rules of other territories in the Caribbean and concluded that this issue may be solved by the implementation of an odd lot market. The odd lot market is a separate market where all transactions of maybe less than a thousand shares or security are handled, depending on the total share capital of the company. Those transactions in this market do not affect the share price,” he explained.
In a statement today, the Chamber of Commerce said it has taken note of the concerns raised regarding the operations of the Guyana Stock Exchange, and its effect on the local business community.
“With access to financing being a leading hurdle for many businesses in Guyana, GSE has a significant role to play in facilitating a transparent and efficient marketplace for companies to raise capital, invest, and grow. The GCCI has been on public record, on multiple occasions, championing the reform of the capital markets and the stock exchange in Guyana,” GCCI said.
The Chamber noted that the lack of the necessary infrastructure, technological advancements, and regulatory framework at the Guyana Stock Exchange, compromises the financial health of businesses, restricts their ability to attract investment, and ultimately hampers their growth potential.
According to GCCI, the substandard functioning of the GSE is also resulting in the sale of stocks in breach of a company’s by-laws, and that is also most worrying.
It said it is imperative that the GSE be rehabilitated to keep pace with the rapid growth and development taking place all across the nation.
Given these issues, the GCCI called for the Guyana Association of Securities Companies and Intermediaries Inc., and Guyana Securities Council (GSC) to prioritise the modernization of the Guyana Stock Exchange’s infrastructure, with a focus on the incorporation of technologically advanced best practices.
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